Property tax - no exemptions for the unemployed / sick?

Surprised today to find out for local property tax there isn’t an exemption if a person is out of work due to being sick. The person in question has a medical card etc. but seems there’s no exemptions for this.

What’s peoples opinions on this? I assumed there would be an exemption

Why would there be, when it's not an income tax?

ian866 said:

Surprised today to find out for local property tax there isn’t an exemption if a person is out of work due to being sick. The person in question has a medical card etc. but seems there’s no exemptions for this.

What’s peoples opinions on this? I assumed there would be an exemption

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I'm not up to date with the latest on LPT, but isn't there an option of deferring the tax if one's income isn't sufficient to pay it?

Don't forget its a deferral, not an exemption, so it will remain payable against the property on sale if the deferral continues.
Its considered fair as it is a tax on the asset value, and considered a form of wealth. Non owners don't pay it because they don't own anything.

lff12 said:

Don't forget its a deferral, not an exemption, so it will remain payable against the property on sale if the deferral continues.

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Plus interest.

lff12 said:

Non owners don't pay it because they don't own anything.

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It's not because they don't own anything. It's because the government is too spineless to charge people for the services that they use. So those in social housing don't have to pay it even if they have high earnings.

Brendan Burgess said:

It's not because they don't own anything. It's because the government is too spineless to charge people for the services that they use. So those in social housing don't have to pay it even if they have high earnings.

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It is because they don't own property You're probably right in the rest, mind you.

Brendan Burgess said:

It's not because they don't own anything. It's because the government is too spineless to charge people for the services that they use. So those in social housing don't have to pay it even if they have high earnings.

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Correct.

There are people paying a mortgage, along with management fees, insurance/maintenance etc - from after-tax income - living in apartment blocks with 10% or more Social (Part V). The latter tenants pay an extremely generous "differential" rent and don't have to worry about most of the other costs. (I'm told most new social houses come fully furnished too - or with payments for purchase of furniture.)

In a previous life I worked for several years in a London Borough administering what was then known as the Poll Tax (officially the Community Charge.) It was paid by all adults over 18 at their "sole or main residence" - with some exemptions and reductions for those on Housing Benefits, and full-time students etc. It was Margaret Thatcher's brainchild and in theory it was much fairer than Domestic Rates which it replaced. And since it was for "local government services" - everyone paid regardless of home ownership status.

The Poll Tax was later replaced with the Council Tax - a kind of a hybrid of Property Tax/Poll Tax. But it's still paid by all - whether a renter or property owner.

BookDotScam said:

The beauty of the LPT is that it’s recession proof

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LPT will bring in about 0.5% of all tax revenue this year.

If all other taxes collapsed by 50% next year LPT would still only bring in 1% of all tax revenue.

It’s not material for most LPT payers and not material for the state either.

And I say that as a big fan of the LPT.

BookDotScam said:

The beauty of the LPT is that it’s recession proof. One of the great failings of the Irish personal tax system during the financial crash of 2008 is that it relied on income tax. We went from ~4% unemployment ~20% unemployment in a flash, and the state coffers took a huge hit.
But with LPT, you have to pay this tax, end of.

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Although this LPT tax source is stable, yes, it is not buoyant.

The receipts don't rise as the economy grows.

As houses were revalued upwards in 2021, the rate was cut sharply, so the receipts remained fairly flat.

Anyone known if Revenue looks for a clawback with LPT?
I have heard of someone selling a property.. Revenue deemed it was undervalued for the last few years and wanted LPT on the difference, before property could be sold.

fistophobia said:

Anyone known if Revenue looks for a clawback with LPT?

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Yes, they definitely do if there are missing payments or in certain cases of undervaluation. @mf1 explained the latter here:

BookDotScam said:

The beauty of the LPT is that it’s recession proof. One of the great failings of the Irish personal tax system during the financial crash of 2008 is that it relied on income tax. We went from ~4% unemployment ~20% unemployment in a flash, and the state coffers took a huge hit.

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IIRC the major problem was our reliance on stamp duty. When property values halve, stamp duty receipts don't go down by 50%; they go down by much, much more because (a) volume of sales in the market drops hugely and you miss out on 100% of the revenue from sales that don't happen, and (b) the sales that do happen, happen at much lower price and so you only get a fraction of the stamp duty that a pre-crashg sale of the same property would have generated.

Stamp duty should be replaced by an annual property tax based on market value. It's bizarre only to tax properties when they change hands, and an annual property tax is much less volatile in the event of a recession (or a property bubble).

fistophobia said:

Anyone known if Revenue looks for a clawback with LPT?

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Yes they do. Sold an investment property last year and the sale price was more than 15% in excess of the LPT based value band that had been initially declared (and was legitimate at the time) and as a result had to pay retrospective LPT at the next level band in order for sale to proceed.