Discusion: Is revenue undervaluing only to increase the rate applied later?


Have you read this? http://www.revenue.ie/en/tax/lpt/valuation-technical-paper.pdf

If not then you probably should, before you call it a nonsense, don't you think?

They have explicitly stated:
"This service provides a guide to average market values of properties in a given locality and offers an indicative valuation band for properties depending on type, age and location. It does not provide market values for individual properties. The guidance is primarily based on the market value of properties sold since the year 2010 in the area, adjusted for average price movements in the interim.

This guidance will be helpful in the majority of cases but there are always properties in an area that differ from the average.

Self assessment requires property owners to honestly assess the market value of their own property. If a property is smaller or larger than the average for the area, is in a significantly poor state of repair or has exceptional or unique features, this will have to be factored into the assessment of the valuation band of the property."
([broken link removed]

So basically you're talking about doing exactly what Revenue have asked you to do.

The purpose of the individual letters is, I would imagine, that they will have informed the taxpayer of the amount that will be sought for collection in the absence of any engagement from the taxpayer i.e. part of due process.
 
mandelbrot said:
Have you read this? http://www.revenue.ie/en/tax/lpt/valuation-technical-paper.pdf

If not then you probably should, before you call it a nonsense, don't you think?
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No, I don't. I don't need to read it to observe that the valuations I've seen on the Revenue heatmap are nonsense for the areas I'm concerned with. However, reading it confirms my suspicions. Their valuations are ridiculously course grained. There's a couple of crackers in there, such as that there is a total of 171 valuations for one entire county!!! In one area I am looking at, the heatmap division has on the order of 2,000 houses in it. I know for a fact that there are variations of a factor of four in value between houses in a single Revenue category. With such a huge standard deviation, how could an average possibly be of any use? So this idea of "indicative value" based on an average is, as I said, nonsense. That paper makes much of the fact that their methodology is similar to other countries, but the only other places I'm familiar with that have a property tax have a two-yearly street-by-street valuation.
 
The farcical valuations we are seeing are simply because of the quality of the data they are using.

The publicly accessible valuation data bases discussed on this board may be helpful for some but for the majority - especially rural areas they are useless.

Revenue needs to start somewhere and I can't understand why they are not collecting the necessary data on the forms we are sending back. At least they have something to check and in the medium to long term they would be building up the comprehensive property register which they require.

Undervaluations leads to a penalty and overvaluations are non refundable.
 
I suppose we will just have to see. I doubt they have details regarding specific numbers of bedrooms per house, but from what I have read, it would appear that the value on the letter is better informed or will be less generic than the map. That would hardly be difficult, mind you.



I'm not sure about this. Do they really want to get into this? If people upgrade/extend, or convert bedroom to toilet etc? They will be able to write fairly good algorithms between now and the next review date that will help them track down glaring anomalies. It's a self assessment tax, I just dont think revenue have any interest in amassing details like this, which would be more suitable for a census or that type of thing.
 
sahd said:
Not sure where you have read that - but I am certain there is no way that the Revenue hold any details about each house .
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How specific is the information on Geodirectory? I don't know whether it knows no. of bedrooms / floor area etc...

Anyway it's all there on the website - go and educate yourself



From the executive summary:
"Effectively, the regression model estimates a value by applying the average for a type of property in an area. Adjustments are made to these average values within in each area, to reflect property specific or neighbourhood-level information, such as distances to amenities or services. The guidance for property owners on Revenue’s website shows the average of the estimated values for all properties within each Electoral District."​

So the letters have a more neighbourhood specific average than the map.​
 
sahd said:
Not sure where you have read that - but I am certain there is no way that the Revenue hold any details about each house .
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Nor did I suggest that. As Madelbrot post above outlines, there is scope for the letter to be significantly better informed or specific than the map. Which is all I was trying to say.
 
I think I'll play it safe here and get an Auctioneer to give me a valuation to include with the return.

Does anyone think likewise?
 
No chance. I'll look at the sales prices of houses around me in the last couple of years, of which there are two or three, and take it from there. Unless you intend taking the p1ss, and assuming you have some camparisons available, that's an approach that should work for most.
 
Actually I do live in a slightly unusual house in a rural location so that's exactly why I think I should get the valuation.
 
Muilleann said:
Actually I do live in a slightly unusual house in a rural location so that's exactly why I think I should get the valuation.
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I still think you'd be just as well off to adjust the price you paid for it by a factor that reflects the change in prices generally over the period of ownership. That's a reasonable and honest basis for a valuation.
 
Many "slightly unusual houses in rural locations" were owner-built, often on previously-owned sites. I can't imagine how applying a generalised property market movement factor %s to such properties could yield an accurate current valuations.
 
David_Dublin said:
Nor did I suggest that. As Madelbrot post above outlines, there is scope for the letter to be significantly better informed or specific than the map. Which is all I was trying to say.
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Not in my experience. Of the houses I know valued between 250k~600ish they all got the same estimate in the letter. They are all within a mile of each other, and in the same type of area.
 
T McGibney said:
Many "slightly unusual houses in rural locations" were owner-built, often on previously-owned sites. I can't imagine how applying a generalised property market movement factor %s to such properties could yield an accurate current valuations.
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Sure, many will be, and many more won't - anyone capable of applying an index to a figure should also be capable of understanding that it won't apply if they didn't actually buy the house.

So then they can just pay amount on the notice of estimate if it appears reasonable to them - if there's ever any comeback on it it'd be a case of "your guess is as good as mine lads".

Otherwise if they think the estimate figure is on the high side, they'll have to think for themselves as to how much they'd want if they were selling it in the morning, or some other reasonable measure.

As someone on here has already said, a few years ago everyone in the country was a property valuation expert, who knew the exact value of their own and their neighbours' properties, but now all of a sudden everyone is bereft of reason.
 
mandelbrot said:
So then they can just pay amount on the notice of estimate if it appears reasonable to them - if there's ever any comeback on it it'd be a case of "your guess is as good as mine lads".
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Exactly. Mine is a one-off build on a separately (five years previously) purchased site. I took the valuation off the Revenue heat map, checked that it was comparable to what a nearby house sold for last year (slightly better site, slightly worse house) and went with that. No rocket science about it, and valuation is acceptable to me, and presumably Revenue.
 

Careful now, we don't want there to be a mass outbreak of common sense...
 
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