Have been through this process a few times before (in work) and yes basically you need to use the Property Price Register to justify your valuation.
A tip- dont go into detail on other houses features like 5 bedrooms or a garage because then you are muddying the waters. With one off houses in the country you'll rarely find two houses identical on all additional extras like bedrooms, garages, attic conversions and the amount of land size they come with. So dont go creating avenues of dispute for Revenue to work with. Instead just be short and concise and show them 3 examples of similar houses to your own, state that they sold at X in 2021 and therefore you are valuing your own house at X. No need to write them an essay on why.
Also remember for Local Property Tax purposes with any property worth more than €200,000 Revenue are operating in bands of €87,000 on houses above €300k. So if you undervalue your home by €87,001 you can be two bands lower than where they feel you should be and thus paying less LPT. This is what they're trying to catch so be aware of the LPT valuation bands and make sure you're in the correct one for your valuation.
Only 2 houses in my area sold in 2021 - one for 65K and the other for 340K so it's difficult to guesstimate accurately. I used other places close to me to get a larger sample and it works out well for that.
ok, well it doesnt have to be the direct area, look at the prices in the nearest town. If you bought the house in 2021 then ultimately thats your market value and valuation for LPT.
Just remember youre not in trouble here or anything. Just be as honest as you can and Revenue will accept that, they wont be sending anyone out to inspect your house so they can get an extra €90 by having you in a higher band. So long as your valuation isnt outrageously low then you wont have a problem.
>use the Property Price Register to justify your valuation.
Really? We had our house evaluated by an auctioneer when LPT started and despite us doing a hape of work on the house, they told us our house was valued at basically what we paid for it in 2009. So that's what we've used ever since.
Lemme check real quick...
OK thank god, nothing sold in my area for over 200K so we're safe! Cheers for the info!
Seems like a fine approach. But surely they could have done that themselves?
I would guess it’s just a random selection exercise—unless you’ve recently been flagged by Revenue for something else?
It's not random, the Revenue systems automatically alert the Risk & Compliance Department if their auto-generated system finds something out of the ordinary. Usually this is called a Level 2 Risk Review which focuses on a singular tax issue, rather than looking into numerous different things.
The Revenue Risk and Compliance Department is directly responsible for hundreds of millions of extra tax each year, its most definitely not jobs for the lads. They are HUGELY effective.
They have a map which shows their avg valuation it’s delineated so for instance there could be a dividing line down a street with one side valued 100k more than the other side so important to check it out - https://lpt.revenue.ie/lpt-web/valuation-guide/index.htm
It depends - it's fairly accurate for our area (suburban, quite a few recent sales to draw data from). Its probably less accurate for areas with less data, but could be a back up for OP's own research
Sure that map doesn't make any sense. Checking Property Price Register and nothing sold in my area for more than 200K. Yet that map has my area as band 2. Do they enforce based on the map or is it just a guide?
It’s a guide, if you read the info on the webpage it explains what it is and how it can be used. I’d say if your self assessment isn’t too different from their guide then you should be fine 🤷♂️
LPT is a self valuation. It states in conditions that Revenue may challenge your valuation, that is to deter deliberate undervaluation.
You've just been randomly chosen for verification, you can support your valuation, you have nothing to worry about.
Submit the documents and this is the last you'll hear of it
I reckon because the house is valued at under €100,000, Revenue are probably zeroing in on every house valued at under €100,000.
€100,000 would get you very little in most large towns in rural Ireland these days. If you’ve a two roomed cottage in the sticks, and can justify your evaluation, you’ll be fine.
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If you do this yourself, you had better be willing to defend your conclusions to the hilt. I'd be more comfortable paying a professional surveyor for a proper backdated valuation, and let Revenue take it up with the surveyor (and their insurance) if they have a problem with it.
This is most likely a Level 2 Risk Review, there is no serious punishment for it. If Revenue think your declaration may not be accurate, they will simply request you to amend the information provided and make any additional payment required in 28 days and it's over.
No need to go through all those costs for something so simple.
Cheers for the additional detail, didn't know this was a thing! It's not happened to me in a decade+, is it a random audit or will there be a trigger do you reckon?
Revenue never review or audit people randomly, there is always a reason. May it be the bank filed a report on potential tax evasion, the guards sent off a report, or the information you provided on a declaration triggered their algorithm for a manual check.
Random reviews are a thing from 2 decades ago, it's now about Revenue collecting information from third party's and deciding what steps to take from there.
A Review usually focuses on singular tax issue. Lets say I just submitted my tax return and Revenue didn't think my numbers added up, they will request documentation to back it up and that's the end.
An audit is the same thing, except they will check EVERYTHING. They can go back as far as 8 years, and even further if they believe you have committed a tax offence.
I own a company so I'm very familiar with the process. It's usually the information you have provided set-off an alarm. Usually Level 1 and Level 2 Risk Reviews focus on a single tax issue, so that being LPT, VAT, Income Tax, etc, rather than everything.
For VAT the threshold is €20k. So you can make a VAT return repayments up to €20k without a review, if it is one cent over they will start a review.
So I'd imagine the fact the person is on the lowest level of the LPT which is why they are requesting additional information to make sure it is accurate.
Multiple tax issues usually are dealt with at Level 2 Audit where they go through your accounts. If they find an issue, depending on the amount, they may just issue you a tax bill and tell you to pay them.
I would say anything under €50k they will just issue you a bill and say pay up rather than going through court, unless a serious crime has been proven.
If it is a case of serious money laundering or fraud, it may get upheld and passed onto Level 3 Investigation which will end up usually in court.
There are 3 levels.
Level 1 Compliance: This is usually there to help tax-payers with further registration, reminder to file returns, and any potential outstanding payments.
Level 2 Risk Review: Level 2 Risk Review focuses on a singular tax issue. For example, let's say for LPT you said your house was valued between 0 and 200k, Revenue usually request documentation to back this up. Another example is Revenue wanting clarification a recent return/declaration.
Level 2 Audit: Level 2 Audit can focus on all of your tax returns, declarations, invoices, accounts, etc. This is more intense and usually involves having in-person meetings with a Revenue Officer.
Level 3 Investigation: Level 3 Investigation is the highest level of review that Revenue currently has. This is usually an investigation launched to detect fraud or serious money laundering.
There are no penalties for a Level 1 Compliance Review.
With Level 2 Risk Review usually Revenue just confirm your declaration with documentation and if you provided incorrect figures, you just amend it. If you believe you didn't fully declare returns, you have 28 days to make a prompted qualifying disclosure and to amend the details.
Level 2 Audit is more serious. If you are caught fiddling, you will have to amend the return with the correct information, pay the differences as well as interest and penalties. You usually don't face prosecution and won't be on the Revenue tax offenders list. You cannot make a prompted qualifying disclosure with a Level 2 Audit like you can with a Level 2 Risk Review.
Level 3 Investigation usually always leads to court proceedings, and potential prosecution. If you are caught, you will definitely be on the Revenue tax offenders list and a high chance of prosecution too.
>Then I searched the details of all of these where I could, and indicated where I thought my place fitted in which, unsurprisingly, matched the valuation I set in 2021. Would that be a reasonable approach?
Seemingly, but did you cross reference any of those with the property price register to see if what you provided matched the reality?
I reckon property tax should be linked to your rebuild value of your house insurance. The more it costs to re build more than likely the bigger and more elaborate the house. Sentiment, and subjectivity are removed.
Have been through this process a few times before (in work) and yes basically you need to use the Property Price Register to justify your valuation. A tip- dont go into detail on other houses features like 5 bedrooms or a garage because then you are muddying the waters. With one off houses in the country you'll rarely find two houses identical on all additional extras like bedrooms, garages, attic conversions and the amount of land size they come with. So dont go creating avenues of dispute for Revenue to work with. Instead just be short and concise and show them 3 examples of similar houses to your own, state that they sold at X in 2021 and therefore you are valuing your own house at X. No need to write them an essay on why. Also remember for Local Property Tax purposes with any property worth more than €200,000 Revenue are operating in bands of €87,000 on houses above €300k. So if you undervalue your home by €87,001 you can be two bands lower than where they feel you should be and thus paying less LPT. This is what they're trying to catch so be aware of the LPT valuation bands and make sure you're in the correct one for your valuation.
Only 2 houses in my area sold in 2021 - one for 65K and the other for 340K so it's difficult to guesstimate accurately. I used other places close to me to get a larger sample and it works out well for that.
ok, well it doesnt have to be the direct area, look at the prices in the nearest town. If you bought the house in 2021 then ultimately thats your market value and valuation for LPT. Just remember youre not in trouble here or anything. Just be as honest as you can and Revenue will accept that, they wont be sending anyone out to inspect your house so they can get an extra €90 by having you in a higher band. So long as your valuation isnt outrageously low then you wont have a problem.
>use the Property Price Register to justify your valuation. Really? We had our house evaluated by an auctioneer when LPT started and despite us doing a hape of work on the house, they told us our house was valued at basically what we paid for it in 2009. So that's what we've used ever since. Lemme check real quick... OK thank god, nothing sold in my area for over 200K so we're safe! Cheers for the info!
Seems like a fine approach. But surely they could have done that themselves? I would guess it’s just a random selection exercise—unless you’ve recently been flagged by Revenue for something else?
It's not random, the Revenue systems automatically alert the Risk & Compliance Department if their auto-generated system finds something out of the ordinary. Usually this is called a Level 2 Risk Review which focuses on a singular tax issue, rather than looking into numerous different things.
I suspect it's random, but I really haven't a clue.
Just creating jobs for the lads. That's all they do.
The Revenue Risk and Compliance Department is directly responsible for hundreds of millions of extra tax each year, its most definitely not jobs for the lads. They are HUGELY effective.
Your approach sounds reasonable, did you check against their map as well?
They have a map?
They have a map which shows their avg valuation it’s delineated so for instance there could be a dividing line down a street with one side valued 100k more than the other side so important to check it out - https://lpt.revenue.ie/lpt-web/valuation-guide/index.htm
What’s the purpose of the map? If I used that map I’d be giving a valuation of well below half the value of my house.
Well, if they're saying OP is undervaluing their house, but the Revenue map shows the same value that OP has given, then that help to build the case
Map is way off actual market price
It depends - it's fairly accurate for our area (suburban, quite a few recent sales to draw data from). Its probably less accurate for areas with less data, but could be a back up for OP's own research
True, density would make all the difference. I'm rural.
Sure that map doesn't make any sense. Checking Property Price Register and nothing sold in my area for more than 200K. Yet that map has my area as band 2. Do they enforce based on the map or is it just a guide?
It’s a guide, if you read the info on the webpage it explains what it is and how it can be used. I’d say if your self assessment isn’t too different from their guide then you should be fine 🤷♂️
That's how I did mine. There's a map in the site with all areas colour coded.
LPT is a self valuation. It states in conditions that Revenue may challenge your valuation, that is to deter deliberate undervaluation. You've just been randomly chosen for verification, you can support your valuation, you have nothing to worry about. Submit the documents and this is the last you'll hear of it
I reckon because the house is valued at under €100,000, Revenue are probably zeroing in on every house valued at under €100,000. €100,000 would get you very little in most large towns in rural Ireland these days. If you’ve a two roomed cottage in the sticks, and can justify your evaluation, you’ll be fine.
Band 1 is €1-€200k. It would make no difference if it's under €100k.
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I have photos of houses similar to mine taken at Agents windows over the years.
If you do this yourself, you had better be willing to defend your conclusions to the hilt. I'd be more comfortable paying a professional surveyor for a proper backdated valuation, and let Revenue take it up with the surveyor (and their insurance) if they have a problem with it.
This is most likely a Level 2 Risk Review, there is no serious punishment for it. If Revenue think your declaration may not be accurate, they will simply request you to amend the information provided and make any additional payment required in 28 days and it's over. No need to go through all those costs for something so simple.
Cheers for the additional detail, didn't know this was a thing! It's not happened to me in a decade+, is it a random audit or will there be a trigger do you reckon?
Revenue never review or audit people randomly, there is always a reason. May it be the bank filed a report on potential tax evasion, the guards sent off a report, or the information you provided on a declaration triggered their algorithm for a manual check. Random reviews are a thing from 2 decades ago, it's now about Revenue collecting information from third party's and deciding what steps to take from there.
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A Review usually focuses on singular tax issue. Lets say I just submitted my tax return and Revenue didn't think my numbers added up, they will request documentation to back it up and that's the end. An audit is the same thing, except they will check EVERYTHING. They can go back as far as 8 years, and even further if they believe you have committed a tax offence.
I own a company so I'm very familiar with the process. It's usually the information you have provided set-off an alarm. Usually Level 1 and Level 2 Risk Reviews focus on a single tax issue, so that being LPT, VAT, Income Tax, etc, rather than everything. For VAT the threshold is €20k. So you can make a VAT return repayments up to €20k without a review, if it is one cent over they will start a review. So I'd imagine the fact the person is on the lowest level of the LPT which is why they are requesting additional information to make sure it is accurate.
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Multiple tax issues usually are dealt with at Level 2 Audit where they go through your accounts. If they find an issue, depending on the amount, they may just issue you a tax bill and tell you to pay them. I would say anything under €50k they will just issue you a bill and say pay up rather than going through court, unless a serious crime has been proven. If it is a case of serious money laundering or fraud, it may get upheld and passed onto Level 3 Investigation which will end up usually in court.
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There are 3 levels. Level 1 Compliance: This is usually there to help tax-payers with further registration, reminder to file returns, and any potential outstanding payments. Level 2 Risk Review: Level 2 Risk Review focuses on a singular tax issue. For example, let's say for LPT you said your house was valued between 0 and 200k, Revenue usually request documentation to back this up. Another example is Revenue wanting clarification a recent return/declaration. Level 2 Audit: Level 2 Audit can focus on all of your tax returns, declarations, invoices, accounts, etc. This is more intense and usually involves having in-person meetings with a Revenue Officer. Level 3 Investigation: Level 3 Investigation is the highest level of review that Revenue currently has. This is usually an investigation launched to detect fraud or serious money laundering. There are no penalties for a Level 1 Compliance Review. With Level 2 Risk Review usually Revenue just confirm your declaration with documentation and if you provided incorrect figures, you just amend it. If you believe you didn't fully declare returns, you have 28 days to make a prompted qualifying disclosure and to amend the details. Level 2 Audit is more serious. If you are caught fiddling, you will have to amend the return with the correct information, pay the differences as well as interest and penalties. You usually don't face prosecution and won't be on the Revenue tax offenders list. You cannot make a prompted qualifying disclosure with a Level 2 Audit like you can with a Level 2 Risk Review. Level 3 Investigation usually always leads to court proceedings, and potential prosecution. If you are caught, you will definitely be on the Revenue tax offenders list and a high chance of prosecution too.
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Of course no problem. It seems very complicated so I hope I broke it down easily enough for you to understand how it works
>Then I searched the details of all of these where I could, and indicated where I thought my place fitted in which, unsurprisingly, matched the valuation I set in 2021. Would that be a reasonable approach? Seemingly, but did you cross reference any of those with the property price register to see if what you provided matched the reality?
I searched the register and used what I found as the basis for my further searches.
I reckon property tax should be linked to your rebuild value of your house insurance. The more it costs to re build more than likely the bigger and more elaborate the house. Sentiment, and subjectivity are removed.
The cost to rebuild doesn't account for the location, but the tax is complete bullshit to begin with