Local Property Tax (LPT): How much would a professional valuation cost?

Is a valuation necessary? How will this aspect (self-declaration of valuation) be policed? Won't there be a tendency for people to undervalue? What are the implications for undervaluing (quite apart from the fact that it shouldn't be done consciously!)?

Can this data be used by a third party? I guess what I am thinking about here is people on LTV tracker mortgages - who were locked in at a decent rate some years ago on the basis of a valuation at that time. Can a bank come back and revisit valuations? Would they use this as an easy way to do that?
 
serotoninsid said:
Is a valuation necessary? How will this aspect (self-declaration of valuation) be policed? Won't there be a tendency for people to undervalue? What are the implications for undervaluing (quite apart from the fact that it shouldn't be done consciously!)?
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There's FAQs here, which address these questions and more: http://www.budget.gov.ie/Budgets/2013/Documents/Local Property Tax FAQs.pdf

serotoninsid said:
Can this data be used by a third party? I guess what I am thinking about here is people on LTV tracker mortgages - who were locked in at a decent rate some years ago on the basis of a valuation at that time. Can a bank come back and revisit valuations? Would they use this as an easy way to do that?
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Simple answer - No. The bank have no right to that data. Introduction of the LPT doesn't change the risk you're concerned about one way or the other - the bank's right to revisit valuations is a totally different and unrelated issue to the LPT valuations (which, as per the link above, will generally be based on a methodology yet to be published by Revenue for the specific purpose of the LPT).

I don't know the first thing about mortgage contracts etc. but I'd find it hard to believe that the bank could have the right to revisit the LTV valuation - surely the whole point of the arrangement is that the LTV factor is fixed at the outset, and if the value goes up over time then the bank is "winning" and if the value goes down the customer is...
 
cashier said:
I would never ask for the services of a valurer becuase I am guessing there are loads of cowboys waiting in the wings to set themselves up as valurers to fleece you besides they will only do what you can do yourself.
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Back in the heady days of the boom AIB handed me a business card and told me they would accept valuations done by this guy and I had to get a valuation to get the mortgage. I phoned him, he showed up, stood in my front room and phoned the estate agent selling the property, asked them the price, wrote the number down on a sheet of paper, signed it and told me that was my valuation. I paid 100 euro for the privilege.

I really dont see how this valuation business is going to work. Its going to be a subjective valuation by the owner who in some cases will still be hopeful that his property is worth a lot, and in other cases will be trying to come in as low as possible. Nothing has been sold in my development in 3 years for example, so nothing for a good comparison and absolutely nothing like the properties elsewhere in the area.

So I could value mine at 150,000, and my neighbour could value his at 99,000 - and who is to say who is right unless one of us sells?
 
There are already average prices published in the press. I suspect if you go lower you will get a visit from some revenue officials.
 
I will give you a very practical example in relation to valuations. I recently agreed a purchase of a house for €75000. The house was advertised publicly. The house was in a small estate of similar properties. I was very reliably informed that an estate agent had valued the same type of house a couple of doors down for between 120 and 125K. There is no difference in either houses. Which price is the market value. I will admit that I think I may have purchased at a good price but it must be the current market price.
 
Time said:
There are already average prices published in the press. I suspect if you go lower you will get a visit from some revenue officials.
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Do you have a link for that Time?

In my own development there are 100 properties that are all worth more or less the same.

Because of the subjective nature of valuing your own property I am sure that over the 100 valuations there will be values ranging from min-max. But each individual valuation doesnt know what his neighbours is using. So are Revenue going to be writing to everyone saying that their valuation doesnt match that of their neighbour, or their other neighbour, or their other one....etc?

I just cannot see how it can be controlled, policed, or justified.

I have one neighbour who simply refuses to believe the amount of negative equity he is in. He recently put his property on the market at 20k higher than a neighbour sold 3 years ago. Naturally he got no interest. So he took it off the market, but he still thinks its worth a lot more than it is and he was just unlucky.
 
In the case of an estate with similar type houses where there has been a sale or two in the previous 6 months or so and it comes up on the property price register will that not be a fairly definitive guide for people in that area. Market value is what you can get for something at a given time.
 
And bear in mind that we are talking about value bands of €50k. If you reckon you're near a band division, like many people will be near the 150k mark or the 200k mark, then you go in slightly low of it, and pay €90 less in LPT.

I don't see the state wasting massive resources in arguing with people over whether a house was worth €145k or €155k at a particular point in time, for the sake of €90.
 
mandelbrot said:
I don't see the state wasting massive resources in arguing with people over whether a house was worth €145k or €155k at a particular point in time, for the sake of €90.
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The bands are 0-100,000 then 100,000-200,000 etc and valued on the midpoint.

Something valued at €145 will pay the same tax as something valued at €155. No one is going to want to value something at under the midpoint and pay tax on a higher midpoint than their property is worth.

If its acceptable that I value my property at €99,000 (to avoid paying a tax on it valued at €150,000 which is definitely isnt worth) and my neighbour values his (more correctly lets say but triggering a higher tax band midpoint) at something like €120,000 then surely its totally unfair on some people? Im happy because Ive heard that the state wont waste massive resources arguing with people over 90 quid, so I just throw in the low valuation and go on my way.

People dont like paying tax anyway, and if they feel that they are being unfairly charged its going to make it all the more contentious.
 
The bands are 0-100,000 then 100,000-200,000 etc and valued on the midpoint.
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No, the bands go in €50,000 slots, from €100,001 to €150,000 say. Until the million.
 
Gervan said:
No, the bands go in €50,000 slots, from €100,001 to €150,000 say. Until the million.
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I apologise, I had mis understood that.

However the same general point still holds, no one is going to want to pay tax on a midpoint of €125k if their property is worth €110k so the sensible thing would be to say that their property is worth €100k.

In 2013, that is the difference between owing €45 and €112.

I think we are going to see a lot of property being valued at €100,000.
 
truthseeker said:
The bands are 0-100,000 then 100,000-200,000 etc and valued on the midpoint.

Something valued at €145 will pay the same tax as something valued at €155. No one is going to want to value something at under the midpoint and pay tax on a higher midpoint than their property is worth.

If its acceptable that I value my property at €99,000 (to avoid paying a tax on it valued at €150,000 which is definitely isnt worth) and my neighbour values his (more correctly lets say but triggering a higher tax band midpoint) at something like €120,000 then surely its totally unfair on some people? Im happy because Ive heard that the state wont waste massive resources arguing with people over 90 quid, so I just throw in the low valuation and go on my way.

People dont like paying tax anyway, and if they feel that they are being unfairly charged its going to make it all the more contentious.
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I'd expect that once there's a critical mass it'll be relatively easy to police compliance, especially in the housing estates. In the case you outlined, a piece of software can easily identify the outlier values which deviate by more than a particular tolerance from the average value in an area, and where such deviation results in a band change.

Then Revenue simply issue assessments for the deficit plus penalties to the people involved - if you know you lowballed then there's no point taking a day off work to go and argue a case you know you can't realistically win in the appeals process; it becomes time to cut your losses.
 
mandelbrot said:
I'd expect that once there's a critical mass it'll be relatively easy to police compliance, especially in the housing estates. In the case you outlined, a piece of software can easily identify the outlier values which deviate by more than a particular tolerance from the average value in an area, and where such deviation results in a band change.

Then Revenue simply issue assessments for the deficit plus penalties to the people involved - if you know you lowballed then there's no point taking a day off work to go and argue a case you know you can't realistically win in the appeals process; it becomes time to cut your losses.
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Mandelbrot you can ignore my specific figures given in the post you quoted, I was wrong about the bands - but the general point is still the same.

I dont disagree with anything you say above but I still believe the subjective nature (and the denial of many people about the true value of their property, or the hope that its still worth more) will result in figures ranging from all kinds of min to max values.

What happens when you sell then, do revenue get on the case because you got 5k more than you valued it for? Or give a refund if you get much less?
 
It's more than likely that Revenue will use the House Price Data compiled by The Property Services Regulatory Authority to check that property owners are not undervaluing their properties.

[broken link removed]
 
I doubt it would be of much use. One off houses being an issue.

Is this going to be a self registering tax like the HC or do you wait for revenue to contact you?
 
Guns N Roses said:
It's more than likely that Revenue will use the House Price Data compiled by The Property Services Regulatory Authority to check that property owners are not undervaluing their properties.

[broken link removed]
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But unless a property similar has sold recently in the area thats useless. The last property in my development (which is unique in terms of what it is and where it is) sold 3 years ago. Prices have changed a lot in 3 years, even in 2 years.

Even within an estate, house types vary.
 
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