With property prices moving up sharply in 1989 – the headline sale of the week was that of a house on Dublin's Ailesbury Road for more than £500,000 – the taxman received a windfall from the self-assessed property tax, as property editor Jack Fagan reported – JOE JOYCE
OVER 6,400 homeowners have paid their residential property tax (RPT) – more than three times the number who had paid by the same time last year. The tax, which was due on October 1st has so far brought in around £4 million.
This represents a vast improvement on the £1 million collected by the same date last year, and is well ahead of the total receipts for 1988 of £2 million. This year’s total take may be twice last year’s figure.
Don Thornhill, an assistant secretary in the Revenue Commissioners with responsibility for VAT and capital taxes, said the level of compliance had been remarkably good. The commissioners were very pleased with the results of their information and advertising campaign.
“It is obviously early days yet as far as processing the information we have received is concerned but preliminary spot checks have shown that the house values submitted by householders are realistic.”
Of the 50,000 forms issued by the tax collectors, about half have already been returned. Those who were sent forms are obliged to return them – whether they are liable for the tax or not. The RPT is levied on houses worth over £82,772 on April 5th last and where family income exceeds £26,654.
The tax is 1½per cent of the difference between the threshold limit and the current value of the house.
In 1988, 5,000 householders were in the tax net and paid £2.5 million. The Revenue estimates that since then the property boom has pushed house values up by between 40 and 100 per cent in some areas of south Dublin.
There is some evidence that residents on certain roads in particular areas of Dublin have come together to agree on a common value of their houses in the hope the Revenue Commissioners will accept their uniformly conservative estimates.
Mr Thornhill said they had already received a tremendous amount of very useful and relevant information which would enable them to update their records following the changes in the housing market.
The high degree of compliance would also enable the Revenue staff in the RPT section to quickly identify those remaining householders who had not complied with the tax.
In 1988, about 38 per cent of the people with houses liable for the tax were exempted because their income was below the threshold. Mr Thornhill said he would expect a lot of income exemption claims this year in certain parts of Dublin, particularly mature residential areas.
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