98. Deputy Catherine Murphy asked the Minister for Finance if he will explain his decision in making a local authority shared ownership homeowner liable for the full cost of the property tax when they are paying a rental price on 50% of the home to local authorities and repaying a mortgage only on the other 50% to purchase that equity share in their home; and if he will make a statement on the matter. [15384/13]
Minister for Finance (Deputy Michael Noonan): The Finance (Local Property Tax) Act 2012 (as amended) sets out how the tax is to be administered and provides that a liability for Local Property Tax (LPT) will arise where a person owns a residential property on the liability date which will be 1 May 2013 for the year 2013 and for subsequent years 1 November in the preceding year.
Section 7 of the 2012 Act provides that local authorities will be liable to pay the LPT on their properties in the same way as any other residential property owner, unless the properties in question are used to accommodate people with special housing needs such as the elderly or people with disabilities.
I am advised by the Revenue Commissioners that residential properties purchased under the various local authority shared ownership schemes will also be subject to LPT and that the liable person in these instances will be the purchaser.
This is on the basis that under these schemes, the purchaser acquires a leasehold interest in the property for a period that exceeds 20 years. Such a purchaser is in the same position as a property owner who purchases a residential property with a mortgage from a financial institution. Accordingly, there is no reason why such an individual should not be liable for payment of the LPT on the property.
As in the case of any other liable person, the LPT is based on the "chargeable value" of the property, which is the price which the unencumbered fee simple of the property might reasonably be expected to fetch on a sale in the open market were that property to be sold on the valuation date in such manner and subject to such conditions as might reasonably be calculated to obtain for the vendor the best price for the property.