LPT: Are owners afraid to disagree with Revenue's Estimate?

[delgirl]

I received the LPT1 today for a rental property - a terraced property in an estate of 65 identical and similar houses.

One idential property in this estate was sold in May 2012 for €88,000 and one very similar property with one extra bedroom was sold for €89,000 in March 2012. I have printed off the details of these sales from the Property Price Register and plan to send them by post with my return to support my estimate.

As with most parts of the country, property prices in this area have not risen in the last year and I have therefore estimated the value of the property at €88,000, which falls into Valuation Band 1 and therefore €45 is due this year for the 6 months from July to December and €90 is payable next year for the full year.

Revenue's estimate for my property as per the LPT1 is Band 2, €112 for this half-year and €225 for the next full year.

One of the owner/occupiers in this estate, who is an elderly man, has also received the Revenue's estimate, which incorrectly puts his property into Band 2 and is afraid to contest it. I have shown him the details of the 2 properties which were sold last year as recorded on the property price register, but, as he's on a pension, he says he will just have to eat and heat less to pay the full estimate as he's afraid they will just take it from his pension anyway.

How many other people whose property value is over-estimated by Revenue will just pay the estimate out of fear of what the repercussions might be since so many threats have been bandied about?

 

[mandelbrot]

What does the guide tell you to do?

EDIT: Here, I looked it up for myself, it says:

"The following may assist you in valuing your property:​

● Property valuation guidance is available on www.revenue.iewhich includes an on-line guide that provides indicative property values. If you do not have internet access, terminals are available at Revenue Information Offices and local libraries. You can also contact the Citizens Information Service for assistance: Phone Service: 0761 07 4000, Monday to Friday, 9am - 8pm or in person by calling to a Citizens Information Service near you.

The valuation guidance is based on:​

- The type of property e.g. detached, semi-detached, apartment etc.​

- The age of the property e.g. built before the year 2000 or after.​

- The average price of the type of property for the general area.​

If your property has certain unique features, is smaller or larger than the average for your area, is in a significantly poor state of repair or has exceptional features, you will have to factor this into your assessment of the valuation of your property.​

● The Residential Property Price Register at www.propertypriceregister.ieproduced by the Property Services Regulatory Authority (PSRA), provides an actual sales price of all properties sold since

January 2010.​

● You may choose to obtain a valuation from a competent professional valuer. Some valuers are offering a special price for LPT valuations.​

● If you have purchased your property or obtained a professional valuation in recent years, you may use this valuation and adjust for any change in values in your area since the date of this valuation.
You should also refer to other sources of information relating to local properties such as the property section of local newspapers, information from local estate agents and property websites."​

So, they've indicated they'll be perfectly happy with a valuation based on information available from the Property Price Register - no need to be attaching stuff to your return - if they want to know how you arrived at your valuation they'll ask you, but I'd be surprised if they did.​

 

[MrEarl]

Hello,

In my personal view, anyone who is afraid to return to the Revenue with a revised (and most likely, more accurate) estimate of the value of their property and the tax due - is simply nuts !

Everyone should be submitting a self declaration, based on what they believe to be their honest estimate of the value of their properties. In the long term, it will serve the country better if we all do this now (as it will help support a genuine forecast of the future tax take from this source).

No one should have to pay more than their share of this tax ... but everyone should have to pay what they are liable for.

Regards

Mr. Earl.

 

[delgirl]

What does the guide tell you to do?

It's very clear to me mandelbrot and I'm happy to provide my own estimate with documentation to back it up, but my point is what about the elderly, such as this gentelman, or those who are afraid to disagree with Revenue?

 

[mandelbrot]

It's very clear to me mandelbrot and I'm happy to provide my own estimate with documentation to back it up, but my point is what about the elderly, such as this gentelman, or those who are afraid to disagree with Revenue?

Sorry, see my edited response above.

 

[dub_nerd]

I just paid my tax online without even waiting for the Revenue letter. So no, don't have the slightest worry about their valuation. Miserable divils wanted to charge an extra 1.49% for using a credit card too.

 

[mandelbrot]

It's very clear to me mandelbrot and I'm happy to provide my own estimate with documentation to back it up, but my point is what about the elderly, such as this gentelman, or those who are afraid to disagree with Revenue?

It's got nothing to do with "disagreeing" with Revenue - the Revenue figure is an average based on property sales in the area since 2010 - it doesn't purport to be an individual valuation, it specifically says as much in their documentation.

They're asking people to value their own houses. Only if someone doesn't file a return does the Revenue "estimate" come into play, as this is the amount they'll seek to collect in the absence of a return by the liable person.

 

[delgirl]

Sorry, see my edited response above.

I've seen your edited response and have read all the literature on the LPT - my point is that some people, not me but the elderly gentleman I have mentioned below, seem to be afraid to challenge Revenue's estimate and are just going to pay whatever estimate is sent to them.

 

[mandelbrot]

I've seen your edited response and have read all the literature on the LPT - my point is that some people, not me but the elderly gentleman I have mentioned below, seem to be afraid to challenge Revenue's estimate and are just going to pay whatever estimate is sent to them.

...

It's got nothing to do with "disagreeing" with Revenue - the Revenue figure is an average based on property sales in the area since 2010 - it doesn't purport to be an individual valuation, it specifically says as much in their documentation.

They're asking people to value their own houses. Only if someone doesn't file a return does the Revenue "estimate" come into play, as this is the amount they'll seek to collect in the absence of a return by the liable person.

 

[delgirl]

Sorry, see my edited response above.

I've seen your edited response and agree with you that it's just an estimate and it's up to the property owner to sumbmit their own estimate. But some people, like the gentleman I met today, are afraid to 'go against' Revenue's estimate, as he put it.

It's incomprehensible to you or me, but some owners are afraid of Revenue and feel threatened.

 

[mandelbrot]

I've seen your edited response and agree with you that it's just an estimate and it's up to the property owner to sumbmit their own estimate. But some people, like the gentleman I met today, are afraid to 'go against' Revenue's estimate, as he put it.

It's incomprehensible to you or me, but some owners are afraid of Revenue and feel threatened.

A lot of that is down to scaremongering in the media coverage.

 

[mandelbrot]

http://www.revenue.ie/en/tax/lpt/local-property-tax-guide.pdf​

"A Notice of Estimate of LPT is included on the enclosed letter. This Estimate is not based on a valuation of your property nor should it be regarded as an accurate calculation of the amount of LPT you should pay."​

Anyone shown that, who is still afraid to put their own valuation on their own house and pay accordingly, is IMHO paying the excess as a stupidity tax.

 

[mathepac]

I looked at the sales data used to value houses in my area and it's ludicrous - too few samples and all high-end stuff (relative to my modest 10-bed palace on 17 acres ) so I lobbed in my own lower valuation.

Also under "Method of Payment" lobbed in "Deferral", ticking the criteria applying to me. No-one in our area has yet received LPT1s. I rang Revenue about that today, also seeking clarification on my own online submission and honestly for the first time ever it was like contacting one of those Asian call centres about Microsoft Windoze - not a clue. Everthing I had done was wrong and there could be consequences, etc, etc

This is an all-time low for Revenue who I find are usually as smart as whips on the phone, in person, by mail etc. All too rushed IMHO, not thought through, very like Inda Kinny the plagiarist, completely unlike Revenue.

 

[delgirl]

Anyone shown that, who is still afraid to put their own valuation on their own house and pay accordingly, is IMHO paying the excess as a stupidity tax.

It's difficult for elderly people to get their heads around this new tax and calling the excess a stupidity tax doesn't help.

It may be anecdotal, but this poor old man made me think about how many others will get the estimate in the post and think that's what they have to pay otherwise Revenue will come after them.

 

[PaddyW]

Got my LPT1 today and have filed online. I checked other similar properties in my area that had sold in the past year or so. Although they were below €100,000, our house has some outbuildings added, plus we added another bathroom so I've lobbed it into band 2. I think that should be safe enough.. Or at least I hope!

 

[Bronte]

Anyone shown that, who is still afraid to put their own valuation on their own house and pay accordingly, is IMHO paying the excess as a stupidity tax.

There will be plenty of people like the elderly neighbour that Delgirl mentioned. They are not stupid, just fearful of the powers of revenue. The problem is not the way people perceive revenue but the way revenue can put fear into honest people.

I hope in about a month as revenue get the data in that they will be able to pinpoint more accurate valuations for people. For example if revenue get proof from a few people in an estate that houses sold for X then revenue should tell the other people in the estate they they have overvalued or undervalued their properties. And then people should be allowed pay the extra without penalty or get a refund quickly. That would be a fairer way to operate this.

 

[T McGibney]

I hope in about a month as revenue get the data in that they will be able to pinpoint more accurate valuations for people. For example if revenue get proof from a few people in an estate that houses sold for X then revenue should tell the other people in the estate they they have overvalued or undervalued their properties. And then people should be allowed pay the extra without penalty or get a refund quickly. That would be a fairer way to operate this.

Sorry, this would be a recipe for confusion and mess. Sale prices vary for all sorts of reasons, many of them relevant only to the individual property being sold.

It would be an absurdity to have citizens scurrying to and from the tax office every time a neighbouring property changes hands above or below the median market value.

 

[Bronte]

If there is an standard estate with lots of similar houses, then if 10 people fill out the form proving they are in Band 1 due to the last 5 sales in say, 2012, and the other 990 people just fill out the form revenue sends with say Band 2. The 990 people are incorrect, the 10 people are correct. Revenue know then that the band for that estate is Band 1 and should inform, should have a duty to inform the other 990 people that it should be band 1.

There is not going to be much of a difference in price between each individual house in estates where say they are all 3 bed semi detached with x size of garden. Hence the banding to take care of that.

 

[mandelbrot]

There will be plenty of people like the elderly neighbour that Delgirl mentioned. They are not stupid, just fearful of the powers of revenue. The problem is not the way people perceive revenue but the way revenue can put fear into honest people.

I hope in about a month as revenue get the data in that they will be able to pinpoint more accurate valuations for people. For example if revenue get proof from a few people in an estate that houses sold for X then revenue should tell the other people in the estate they they have overvalued or undervalued their properties. And then people should be allowed pay the extra without penalty or get a refund quickly. That would be a fairer way to operate this.

Revenue already have that proof, it's been incorporated into their model in determining the average value for an area.

If there is an standard estate with lots of similar houses, then if 10 people fill out the form proving they are in Band 1 due to the last 5 sales in say, 2012, and the other 990 people just fill out the form revenue sends with say Band 2. The 990 people are incorrect, the 10 people are correct. Revenue know then that the band for that estate is Band 1 and should inform, should have a duty to inform the other 990 people that it should be band 1.

There is not going to be much of a difference in price between each individual house in estates where say they are all 3 bed semi detached with x size of garden. Hence the banding to take care of that.

What you've described there would be a perfect world, and that doesn't come cheap. As long as you'd be OK with the tax rate being increased substantially to deal with the increased cost of administration all of the above would require then I say go for it..!

Also, your 990 people are all very silly people IMHO, who didn't read the guidance Revenue gave them, which asked them to value their house, and to refer to whatever sources they think suitable to aid them in that valuation, and specifically told them the estimate is not a valuation by Revenue of their specific house.

Seriously though, I think you're missing the point that the tax is self assessment - if Revenue had the means to tell people what every individual property in the country is worth then it wouldn't need to be a self assessment tax.

I think you're being very optimistic with a prediction of one month for Revenue to be able to assimilate the data on this - there's over 1.5m properties, and from some of the stuff I'm seeing on here and elsewhere lots of people are going to inundate Revenue with paper forms accompanied by cutouts or printouts of recent sales in their area and other stuff to backup their valuations.

You must think Revenue have an endless resource pool or can assimilate data by magic if you think they're going to have any meaningful conclusions about anything in the next month, or even 6. Their main priority, as I heard Ms Feehily say on the radio, will be to ensure compliance with the filing of the LPT returns, and only after they've got a decent compliance rate will they start trying to find what she described as the "outliers" for scrutiny.

 

[Bronte]

Seriously though, I think you're missing the point that the tax is self assessment -.

But most people are PAYE and have no experience whatsoever of self assessment. Most people will probably think that this is a bill, revenue says it is X so I'll pay X.

In relation to data and analysis. How come Daft were able to come up with a simple to use, much better than revenue webside so quick. And I'd love to know how much revenue paid for their system. I bet Daft paid nothing like that.

It doesn't have to be a month, lets make it from to 2016 for revenue to inform everybody who has over paid or underpaid. Because surely they are going to feed the data on the forms into their computer system.

Revenue stated on the radio they are going to going to do an analysis. That they will check out what values people have and where your value is way off then they are coming after those people. The 10 people in my example who correctly valued will get caught by this, but they can back up the value so presumable they will be ok. Revenue had a special word for this analysis - 'outlining' or somesuch.

And you can be assured I'll be sending in my proofs and a letter outlining my honest valuation of my property too. It's exactly what I'd planned to do once I heard how it worked. For no other self assessment did I ever have to do such a thing.