# LPT: PAYE Workers to have property tax taken from wages.



## elefantfresh (28 Aug 2012)

Interesting article : Workers to have property tax taken from wages - about deducting the new property tax from your pay packet.


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## Jazz01 (28 Aug 2012)

... so - for a married / co-habiting couple, both receiving a salary & PAYE  - will they both have to pay the charge for the same home as it's taken at source?


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## Gervan (28 Aug 2012)

I presume the one who registered will have to pay. And if neither registered...?


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## truthseeker (28 Aug 2012)

Considering they dont even seem to know the base figure and hundreds of thousands still havent registered, Id be inclined to put this down to more scaremongering about the shambles that is the household charge.


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## reddanmm (29 Nov 2012)

It has been on the news again today about taking the property tax at source .  How will this work i read somewhere that your employer would have to ask your permission to deduct this money 

Also  how does your employer know how much to deduct from your wages how will the know how much your property is worth.  We still dont know how they are going to value the properties .


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## roker (29 Nov 2012)

will they take it from my pension the same as they took USC


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## truthseeker (29 Nov 2012)

Good luck to them taking it at source from me or thousands like me, I have no income or social welfare.


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## wbbs (29 Nov 2012)

Was thinking the same myself, will be hard to deduct it from nothing!


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## Time (29 Nov 2012)

How are they going to value the houses?


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## reddanmm (30 Nov 2012)

Exactly they still not have said how they are coming up with  their valuation of properties .


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## Importer (30 Nov 2012)

I think the question of valuation of properties has been discussed. At least I have heard the same reference to it several times.

The valuation will be on a self assessment basis using valuation bands 
The bands will increase in tranches of 50000 and there will be a tax attached to each band, based at an estimated 0.2% of property value

150000 - 200000
200000 - 250000
250000 - 300000
300000 - 350000
etc
etc

We obviously cant be sure that this is the final model but it is the one that Ive heard mentioned several times. Its probably the most likely method and easiest to implement


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## Time (30 Nov 2012)

Grand so, I shall value my hovel at €200.


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## Importer (30 Nov 2012)

Lol, Yes you can do that but if your neighbour values his at 200000 and the man across the street manages to sell his for 220000, you're going to be in trouble with penalties,taxes and interest.


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## reddanmm (30 Nov 2012)

Well If that's the case then i paid over 200 grand for my house but the house next door went for 60 grand less because the developer needed quick cash so do i value my house the same as the house that was just sold last month .


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## Importer (30 Nov 2012)

I'm no expert on this but I would imagine that you'd have a very good case for arguing that your house is only worth the same as the one that sold next door for a song especially if the house next door is similar in size and design
and condition.

There is no doubt that the new property price register will be a key tool for fixing values for the new property tax or indeed for defending values in the case of a revenue audit


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## reddanmm (30 Nov 2012)

I agree the house was a showhouse so definitely same size and  condition . So i will go on that valuation it will bring me in to a lower band


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## callybags (30 Nov 2012)

People should have to declare their assessed value on a yearly basis for the property tax.

If the house is sold within 12 months for more than the declared value, then a 50% windfall tax should be applied to the excess.

This would focus people's minds on getting their values accurate.


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## allie12 (30 Nov 2012)

What if there have been no houses sold in the area in years? Apartment in Dublin and no-one has been able to sell. (The original value was nearly 400k)


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## Time (30 Nov 2012)

If a house is under threat of repossession there is no incentive to get the value correct hence a valuation of 200 euro. And if the tax is registered as a debt on the house they won't care as it won't be their problem.


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## Importer (30 Nov 2012)

Then the situation is going to become a little more blurred.

There are a number of other ways at arriving at a property valuation and Im sure Revenue will accept valuations that are calculated reasonably and with logic.

For example if there are no comparable apartments sold in the area, you might work on the basis of the rent yield. If the apartment rents at 7000 per year, it wouldnt be unreasonable to assume a net rent yield of say 7%, which would imply a valuation of 100000


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## Importer (30 Nov 2012)

Time
There is every incentive to get the valuation right even in the case where a house
"is under threat of repossession" Revenue can pursue you for the money personally. "Taxes owed" are outside the remit of the personal Insolvency bill and even in Irelands current bankruptcy legislation (from 1988) Preferrential creditors (ie Revenue) need to be paid.


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## Time (30 Nov 2012)

Their biggest job will be finding the owners. Hasn't worked out so well so far.


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## Importer (30 Nov 2012)

Tax evasion and criminality is a whole new topic on its own.....


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## reddanmm (30 Nov 2012)

Still does not answer the question of how they will take the payment from your pay cheque . I think it was a guy on newstalk that was saying that your employer would have to seek your permission to deduct the money .
 What if you did not want it to be deducted at source you might want  to pay in quarterly installments or a lump sum one off payment .


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## ajapale (30 Nov 2012)

Importer said:


> There are a number of other ways at arriving at a property valuation and Im sure Revenue will accept valuations that are calculated reasonably and with logic.



I agree with Importer when he says that revenue will accept valuations that are calculated reasonably and with logic.

Im a bit unsure however how this tax deduction at source will work in practice at a practical level. Will the company pay roll IT systems be able to deduct this tax from wages?

As Roker said above will the tax be deducted from Pension payrolls? I know of some pensioners on very very small pensions, how can you deduct say €300 from a €250 pension cheque?


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## Joe_90 (30 Nov 2012)

It is going to be difficult to establish a valuation basis.  Are people going to go around to their neighbours and decide on a valuation for the entire estate.

That aside I think that they will look at another flat rate, say €100 per household, so if the current personal credit is €1,650 they will knock €100 off that in your cert of tax credits for everyone,  then it will be up to you to ring them and say I own the house with my spouse/partner and I want to pay half or remove it from them or I do not own a house.  

Self employed people will have it added to their return.


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## dam099 (30 Nov 2012)

Revenue can just reduce your tax credits, no need for employer to do anything then.


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## Importer (30 Nov 2012)

Im inclined to agree with dam099 that the property tax will just be deducted from the personal tax credits.

Revenue will ask all paye workers to provide a valuation for their properties and set a deadline for compliance. Failure to comply most likely will result in hefty penalties. The tax claculation based on the valuations received will be deducted from personal tax credits. The adjusted tax credit cert will be sent on to Employers as normal

The Employers role will be just to apply the tax credits, as they do today

Of course this is all speculation but I fail to see any problems in the successful implementation of this. Remember that the implementation and administration of this tax will rest with the Revenue Commissioners who normally do not mess about. You can expect a completely different approach than experienced with The LAs trying to collect the household charge.

I have a feeling that anyone who tries to beat the system, and I have no doubt there will be 000s, will pay harshly for it in the end


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## Time (30 Nov 2012)

Your assuming that everyone liable actually works and pays tax.


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## Importer (30 Nov 2012)

No Im not making any assumptions.

In my last post I was just referring to the Paye workers and these account for the majority of tax payers

Collection of the tax for other categories of tax payers will be different.

Look, Its no different to a typical self employed electrician or carpenter or farmer who are self assessed and pay their income tax on the 31 October each year. They need to pay their income tax of their own volition. The Revenue will not call to their houses on the 31 October to collect a cheque, yet most self employed people are astute enough to know that not paying their income tax on time will end up in tears.

You can believe what you want. You can believe that the Revenue will not be successful in collecting this tax and thats fine with me. I believe that they will crack it and the majority will pay up.. Everyone to their own


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## Emma1980 (30 Nov 2012)

on the registration, in relation to joint owners, it does say that two names can be entered but only one pps number can be entered - sounds like it will be the person registered who will have to make the payments from their wages??!! although hopefully they will allow a one off payment instead of it coming from wages! 
​


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## truthseeker (30 Nov 2012)

Importer said:


> Look, Its no different to a typical self employed electrician or carpenter or farmer who are self assessed and pay their income tax on the 31 October each year. They need to pay their income tax of their own volition. The Revenue will not call to their houses on the 31 October to collect a cheque, yet most self employed people are astute enough to know that not paying their income tax on time will end up in tears.



This assumes that the person the property is registered to has an income. In my case its not true, in the case of many of my friends and family its not true. There are huge numbers of people living off savings at the moment or ineligible for social welfare (although the registered owner of the property) because they were assessed on their partners earnings.

Revenue and social welfare systems dont have any link up.


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## Dermot (30 Nov 2012)

How will property valued. I recently purchased a house in an estate for €75k.  This property was advertised and was available to anyone else. The property was in good condition. I am told that two local auctioneers valued the same type house in the same estate for figures between 120k and 125k. The estate is relatively small and there is no specific location reason within the estate for a variation in the price.  The internal condition of the houses are all the same.  Which price will people in the estate pay the property tax on. This is an absolutely genuine situation.


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## Importer (30 Nov 2012)

I dont think there is any value in jumping too far ahead and worrying how people with no income will pay the property tax. We don't know if this category of person will be exempt or not or what the politicians have in mind. 

We'll just have to wait and see whats rolled out on budget day.


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## roker (30 Nov 2012)

The valuation could be on the insurance rebuild cost, which is taken from the charts published by the Society of Chartered Surveyors of Ireland


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## Time (30 Nov 2012)

It will take a lot of staff to go around making these valuations.


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## reddanmm (30 Nov 2012)

what about all the people who have not registered 600,000 apparently just say 300,000 are in employment how will they deduct their tax from source. they still don't have a database of home owners


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## Time (30 Nov 2012)

The whole thing smacks of being an omnishambles.


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## Dermot (30 Nov 2012)

I cannot see it being done on rebuild costs. This would be open to as many if not more variations than the other possible methods. I will be sticking with my sale agreed price in my case. This is the price I purchased it for on the open market and I do not see how this can be contracted. If they insist on a higher valuation they can buy it off me or arrange a sale for me and I will take the profit. The value of anything is what someone else is prepared to pay for it.


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## roker (1 Dec 2012)

Demot: My rebuild cost is about half of what I paid for it. And if the Insurance companies accept it it must be OK


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## Dermot (1 Dec 2012)

I think that whatever chance the property charge has of working it will have to be based on the value of the property. This will be very difficult to enforce as will every other system. Some people think site value is a solution but if the property on which the site is on is low so is the value of the site. If the house is going to be assessed according to value surely there  is no better way of valuing than by looking at the most recent prices achieved in an estate. There are huge no of problems with pricing one off houses etc. I feel it is going to be a nightmare to sort out.


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## Time (3 Dec 2012)

Joan Burton has said that a compulsory deduction of property tax from welfare payments would be difficult.


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## truthseeker (3 Dec 2012)

Time said:


> Joan Burton has said that a compulsory deduction of property tax from welfare payments would be difficult.



I notice Joan Burton also said that older people could delay paying the property tax until they were dead.

Given the state of the health service they probably wont have to wait to long to collect.


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## Firefly (3 Dec 2012)

elefantfresh said:


> Interesting article : Workers to have property tax taken from wages - about deducting the new property tax from your pay packet.



Maybe you are better off on the dole afterall?


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## truthseeker (4 Dec 2012)

Firefly said:


> Maybe you are better off on the dole afterall?



The dole is totally unfair and after the initial year punishes people who have contributed to society and saved some money, while rewarding those who squandered anything they ever earned.

No surprise that workers are once again to be punished. No doubt the new property tax will have exemptions for people in social housing.


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## elefantfresh (4 Dec 2012)

> Maybe you are better off on the dole afterall?



A dreadful thought, but there is definitely something in it. I'm not suggesting that it all smells of roses but there sure seems to be a lot of people who have a career on it. 

I remember being made redundant around 2002 - by week 7, I was screaming to get back to work. Not from a financial stand point, but to keep my brain working.


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## sillymilly (4 Dec 2012)

Dreading hearing details of the property tax tomorrow.......  and the other cuts too.  Am just about scraping by (had to retire due to serious illness).  Have 2 young kids.  On interest only mortgage as can't pay any more so don't know how we are going to find the money to pay this new tax.  Our childrens allowance goes off the mortgage as it is.


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## mandelbrot (14 Dec 2012)

Fr. Ted said:


> I see there is a legal challenge ongoing,
> 
> What is amazing is all this discussion around valuations, was the value not always 5 times the annual rent?
> 
> Is this valuation discussion not a red herring and a distraction from the real issue?


 
The legal challenge is to the household charge - has the LPT even been enacted yet? Maybe there'll be a legal challenge to it also, but I think your post is the red herring, one way or another property tax is coming.


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## ajapale (14 Dec 2012)

mandelbrot said:


> The legal challenge is to the household charge


Yes and it appears to challenge the legality of the "_*failure to declare*_" rather than the failure to acutally pay the HC.

Anyway its a moot point now as the revenue will be collecting the new LPT and well see how far the guys in Mayo will get if they "_*fail to declare*_" to revenue.


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