FAQ What happens if I undervalue my house for LPT?

twofor1

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Charlie Weston has an article on undervaluing your property in today's Indo.
https://www.independent.ie/business...hen-making-property-tax-returns-40902671.html

I have submitted a band below what revenue suggested, if questioned the property price register shows 5 of the 7 sold in my estate in 2020 - 2021 were in the band below. The other two sold for 2 bands above what revenue suggested, mine does not have the features that got these two the higher prices.
 

Gordon Gekko

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To me, it’s sounds like you have thought about this properly and documented your position with supporting evidence. I’d be shocked if you had any issues.

I bumped into my neighbour and he seems obsessed with the interactive map and Revenue estimates.

He seemed surprised when I said it’s just what the property’s actually worth.
 

noproblem

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Claire Byrne had someone from revenue on her programme this morning talking about everything that's involved. You'll get it on playback.

Moderator Edit: Podcast added here.
 
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NoRegretsCoyote

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Revenue don't have the staff to go through literally millions of subjective estimates and query them.

They will claw it back if you eventually sell it for considerably more than what you valued it at.
 

RetirementPlan

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Revenue don't have the staff to go through literally millions of subjective estimates and query them.

They will claw it back if you eventually sell it for considerably more than what you valued it at.
They have computers though, pretty good ones and pretty big ones. So it wouldn't be hard at all for them to identify those estimates that are out of line with their own guidelines, and initiate a query process with those taxpayers.
 

Leper

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Remember with whom you are dealing. Undervalue your home and it gives out a message that you are chancing your arm. Revenue will likely look at your yearly tax submissions with that in mind should they have reason to do so. There's nothing like honest honesty.
 

NoRegretsCoyote

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So it wouldn't be hard at all for them to identify those estimates that are out of line with their own guidelines, and initiate a query process with those taxpayers.
I found the Revenue Technical paper from 2013 that compared the model with reality, got to Figure 4. It showed that the model correctly estimated the band only 50% of the time (that's quite good by the way!).

2% of dwellings were either three bands too high or two low. That's 40,000 dwellings!

My guess would be that Revenue's threshold for querying will be something like 3 bands or more below model estimate.

For most people this would be either deliberate or extreme ignorance. I'd be surprised if anyone giving a good-faith educated guess will be queried.
 

skrooge

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If you've something to hide then obviously you don't want to draw attention to yourself.

Am I right in thinking, if you have a reasonable case, there's little to loose. They might challenge your estimate. They might not. Worst that happens is they clawback the difference at a later date? An extra euro in my pocket now versus the potential clawback of same euro at a later date?
 

Laughahalla

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the only person really qualified to value your property is a property Valuer
Anything else is an educated guess.
Even two identical houses from the outside can have very different valuations depending on the state of the house on the inside.

I used the map supplied by Revenue. Is it lower than what I could get for the house. Maybe, who knows until you actually sell it.

Everybody thought in 2008 that their homes were worth 40% more than what they were worth just over a year later.
 
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blanketyblank

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Where can I see the map that Revenue has showing property taxes?

And when is it that property taxes are to be reviewed? Is it next year?

Thanks
 

odyssey06

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Where can I see the map that Revenue has showing property taxes?

And when is it that property taxes are to be reviewed? Is it next year?

Thanks

Needs to be reassessed this year for next year. See this thread

This is the link
 

michaelm

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I have submitted a band below what revenue suggested
I suspect many people do that. It wouldn't surprise me if Revenue take that into account and produce estimated values that err on the high side. I highly doubt you'll have any problem.
 

Pinoy adventure

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We are just going too work off there estimated value on the letter received.
It’s interesting too see what the neighbours paid for there houses on the property price website though
 

michaelm

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Are the letter valuations more granular, differing from the map? The map is pretty useless.
 

twofor1

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Are the letter valuations more granular, differing from the map?
I put my Eircode into revenues map, it pinpointed my house, and gave me the band that I and the property price register think is right. The letter I got from revenue has my house 1 band above what the map says.
 

RetirementPlan

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I found the Revenue Technical paper from 2013 that compared the model with reality, got to Figure 4. It showed that the model correctly estimated the band only 50% of the time (that's quite good by the way!).

2% of dwellings were either three bands too high or two low. That's 40,000 dwellings!

My guess would be that Revenue's threshold for querying will be something like 3 bands or more below model estimate.

For most people this would be either deliberate or extreme ignorance. I'd be surprised if anyone giving a good-faith educated guess will be queried.
A bit of a wild guess, perhaps? I'm not sure I'd want to base my future tax compliance on a guess like that.
If you've something to hide then obviously you don't want to draw attention to yourself.

Am I right in thinking, if you have a reasonable case, there's little to loose. They might challenge your estimate. They might not. Worst that happens is they clawback the difference at a later date? An extra euro in my pocket now versus the potential clawback of same euro at a later date?
I'm presuming they could do their usual 'interest and penalties' as they do with any unpaid tax, if they really wanted to. I doubt if they would want to do that in any widespread way, but it could possibly be extra euros coming out of your pocket at a later date.
the only person really qualified to value your property is a property Valuer
Anything else is an educated guess.
Even two identical houses from the outside can have very different valuations depending on the state of the house on the inside.

I used the map supplied by Revenue. Is it lower than what I could get for the house. Maybe, who knows until you actually sell it.

Everybody thought in 2008 that their homes were worth 40% more than what they were worth just over a year later.
The Revenue person on Morning Ireland was making the point that it's not an exact valuation that they're looking for - just to set out which band you are in, and the bands are fairly broad.
 

skrooge

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I'm presuming they could do their usual 'interest and penalties' as they do with any unpaid tax, if they really wanted to. I doubt if they would want to do that in any widespread way, but it could possibly be extra euros coming out of your pocket at a later date.

This is ultimately the question have they come after people for this. Fair enough if I'm out by a huge multiple/many bands but if we're talking about €10k or a single band are they really going to come after people for something that is so subjective.
 

skrooge

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What about the alternative. If I overvalue my house can I claim back my property tax if down the line (or in Revenue speak within the next 4 years) I end up selling below my estimated band?
 

Gordon Gekko

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The map has me 11 bands below the correct level, and Revenue’s estimate has me 6 bands below the correct level.

I’m struggling to understand why they produce all this guff rather than simply and clearly asking people to apply market value and using their computer systems to identify anomalies for investigation.
 

NoRegretsCoyote

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I’m struggling to understand why they produce all this guff rather than simply and clearly asking people to apply market value and using their computer systems to identify anomalies for investigation.
100%.

It made sense in 2013 when 1) the LPT was completely new; 2) there were only three years of PPR transactions available 3) the CSO's property price index was only a year old, and only went back to 2005, 4) property prices had fallen 50% in the previous 7 years. I talked to lots of people then who had lived in their house for a long time and didn't pay much attention to nearby sales prices (if there had been any). They really didn't have much of an idea of what their house was worth.

But in 2021 you have 15 years of a CSO index, the PPR, a baseline of what you valued it for in 2013, etc. This should really be an internal Revenue IT tool. Even with all the disclaimers people are assuming that there is some kind of precsion involved.
 
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