Property Tax in Ireland: Everything You Need to Know

If you plan on buying or selling a property in Ireland, you need to understand the property tax you’ll pay. Ireland is a popular destination for vacation homes but its taxation on properties is different than that in the UK or Europe.

In Ireland, tax is regulated by the Revenue Commissioners. Here we’ll explain how to pay property tax in Ireland and what you’ll need to know to calculate property tax in Ireland.

 

What is Property Tax in Ireland?

Since 2013, homeowners in Ireland owe an annual payout to the government, which is based on a percentage of the value of their property. You can pay upfront or in instalments and there’s a fine for failing to do so in a timely manner. 

Property tax in Ireland consists of several fees that are payable to the Irish Tax and Customs Revenue Agency on residential and non-residential property, as well as land. Even foreigners and non-residents in Ireland may be required to pay property tax depending on the type and condition of the property they own.

There are several types of property tax in Ireland based on the nature of the transaction:

  • Stamp duty when buying property
  • Local property tax as a homeowner 
  • Capital gains tax when selling property

The Irish Local Property Tax (LPT) is charged annually through a self-assessment on the value of all residential properties. From the information shared on the Revenue.ie website, Ireland’s Tax and Customs:

The amount of LPT due for 2020 depends on the value declared for the property and the LPT rate applying to the property for 2020. Property values are organised into valuation bands. The tax liability is calculated by applying the tax rate to the mid-point of the band. The rate of LPT is 0.18% for properties up to a market value of €1m. Residential properties valued over €1m are assessed at the actual value at 0.18% on the first €1m in value and 0.25% on the portion of the value above €1m (no banding applies).

Although the property local tax is at the discretion of local councils who can increase or decrease the base rate by 15%, it is the central or national government that decides everything else. This means its introduction, tax rate, base and valuation, and collection vis-à-vis Revenue.

Typically, 20% of the LPT receipts go towards an equalisation fund. This way well-disposed (in terms of the number of properties and their valuations) local councils can partially fund poorer local councils. Such a model provides an alternative to where this equalisation funding comes directly from central government. 

 

How much is property tax in Ireland?

In general, any individual – resident or not – who owns property in Ireland is liable to pay property tax.

 

Rental Income

If you are receiving money from a rental property in Ireland then it is considered as normal income from work, and is taxed at the same rates. For most investors, the tax on rental income would be charged at 41%.

 

Stamp Duty (Transfer Tax)

Non-commercial (residential) properties enjoy a much lower stamp duty tax as it has been reduced substantially in recent budgets. Current rates of stamp duty for residential property are 1% for the first €1,000,000 of consideration with the excess payable at 2%.

Stamp duty on commercial properties has also been reduced to a flat rate of 2% for documents executed after 6 December 2011. This includes non-residential farmland, commercial, and industrial buildings.

You have to pay stamp duty within 30 days of the property transferring to your name, or face a penalty.

 

Property Tax

One form of property tax, known as Local Authority Rates, is payable on commercial property. The rate depends on the value of the property as well as the local authority in the area where the property is located. This is generally a tax-deductible expense.

In 2013, a local property tax was introduced for residential properties. The rate is 0.18% of the market value of any property valued up to €1 million, with a rate of 0.25% above €1 million. Any new property or property that has previously been unused was exempt from this property tax until 2016.

 

Capital Gains Tax

Capital gains tax is generally charged at 33% upon transfer of ownership of property. In limited circumstances, a 40% rate applies to certain assets. There is an exemption from capital gains tax on transfers of assets between spouses and an annual exemption of €1,270 per individual (non-transferable between spouses).

To calculate the taxable amount you take the value of the property, and deduct:

  • The price you paid to purchase the asset.
  • Money you’ve invested in it, that has added to the value of the asset.
  • Costs associated with the purchase and sale.

Since 2012, there has been a new incentive relief in place. It applies for the first seven years of ownership for properties bought during 2012 and 2013. Where such property is held for seven years, the gains that accrue during that period will not attract Capital Gains Tax.

For capital gains tax, if you sell your property between January 1 and November 30, the tax must be paid by December 15 of that year.

 

How to Pay property tax in Ireland?

You pay local property tax on your own residence in Ireland. 

You can use the calculator on the The Revenue website to work out the amount of Local Property Tax you owe on your property for any period. You need to enter your taxable period, the respective local authority, and the property value band. The calculator will then tell you the local property tax charge. You can always consult a financial expert if you’re not sure whether you need to pay.

When you are ready to pay your property tax, you can do so via a direct debit transfer. Alternatively, you can choose to pay a single payment in full via a debit or credit card. There is more information on the website of the Revenue agency.

Some types of tax are eligible for payment online, such as: Local Property TaxCapital Gains Tax and Stamp Duty. You can make a payment online for Capital Gains tax via your ROS (Revenue Online Service) or myAccount. You can pay for Local Property Tax in a number of ways, including via a MasterCard credit or debit card, or VISA credit or debit card via your online LPT account. 

Bear in mind that tax laws in Ireland are subject to change. Currently, the Irish tax treaty network contains in excess of 40 tax treaties. Most of Ireland’s tax treaties follow a common pattern and are usually modeled on the OECD tax treaty model. 

Quick Enquiry

Any data you provide Novellus Bridging will be used in the decision making and processing of any future loan. The data we collect will be shared with our legal representatives and potentially other third parties to assess your suitability and for future transactions on any loan(s) with Novellus Bridging. We will hold information securely for up to 5 years after your contract with Novellus Bridging ends. Should you wish for us to delete all traces of data we hold about you after your contract expires or should you wish to request details of data we hold about you please email [email protected]

Contact

Novellus Bridging, 28-32 Pembroke Street Upper,
Dublin, D02 NT28

+353 1 531 4237
[email protected]

©2022 Novellus Bridging is a trading style of Novellus Limited registered in England and Wales.
Company No. 10790634. Registered address: 1 Elmfield Park, Bromley Kent, BR1 1LU.

THINK CAREFULLY BEFORE SECURING ANY DEBT AGAINST YOUR PROPERTY. YOUR PROPERTIES MAY BE AT RISK IF YOU DO NOT MEET THE COMMITMENTS OF YOUR LOAN