Monday, February 18, 2013

Property Tax Exemption and Self Builds

Self Build Houses and Property Tax Exemptions in Ireland

Read all about Property Tax Here


The regulations on Property Tax and the FAQ provided by Revenue don't seem to correspond - but here is what we have found.

The FAQ on the Revenue website (as at Feb 18th 2013) states the following

"If the self build  property has been completed before 1 May 2013, the property will be subject to LPT, unless the person who self-builds the property is eligible for first time buyer exemption and occupies the property as his or her sole or main residence."

"Any residential property built by its owner after 1 May 2013 and before 1 November 2016, will not be liable for LPT until 2017."




The actual legislation mentions unoccupied new homes :

Section 6
A residential property shall not, for the purposes of this Act, be regarded as a relevant residential property where the property—

(a) has been completed but not sold by the person who has constructed the property, or who has had the property constructed,
(b) is not occupied as a dwelling,
(c) has produced no income that would be chargeable to income tax or corporation tax, as the case may be, under Case I, Case IV or Case V, as the case may be, of Sched- ule D (within the meaning of section 18 of the Act of 1997), and
(d) is trading stock (within the meaning of section 89 of the Act of 1997) of the person referred to in paragraph (a).


Later in the legislation - it refers to these properties that are exempt under Section 6 and say that if one of these properties is sold between Jan 2013 and Oct  2016 it will not be classed as a liable property until after Oct 2016

Here is that section

9.—Notwithstanding that a residential property of the type
referred to in section 6 is sold at any time in the period beginning on
1 January 2013 and ending on 31 October 2016, the property shall
not be a relevant residential property in respect of any liability date
occurring in the period following the first sale of the property and ending on 31 October 2016.


So - for a self build property - although there is no actual sale of the property it could be argued that self builds should be treated in the same way as anyone buying a new house from a builder.

There is another section on first time buyers - which could also be ssen as relevant to Self Builds. It removes liability until 2016 for any house bought between Jan 2013 and Dec 2013 where the buyer would have been eligible for Mortgage Interest Relief (if it was still available)

"8.—(1) Subject to subsection (3), a residential property shall not,
for the purposes of this Act, be regarded as a relevant residential
12
property in respect of the liability dates in the years 2013, 2014 and
2015 where—
(a) the property is purchased in the period beginning on 1
January 2013 and ending on 31 December 2013,
5 (b) subject to subsection (2), the property is purchased by a
person who would have been entitled to relief under
section 244 of the Act of 1997 had a qualifying loan
(within the meaning of that section) been taken out in
the period beginning on 1 January 2004 and ending on 31
10 December 2012, and
(c) after the property is purchased, it is occupied as the sole
or main residence of the person referred to in paragraph
(b) (or, in the case of the persons referred to in subsection
(2)(a), (b) or (c), the married couple, civil partners or
15 cohabitants, as the case may be)."


Personally - I would be happy to go with the quote from the FAQ on the Revenue website

Any residential property built by its owner after 1 May 2013 and before 1 November 2016, will not be liable for LPT until 2017."

In tis statement - I assume by "built"  they mean completed  .


1 comment:

Natalie Baker said...

Thanks for the Information. Did not know that there was property exemption tax for Self Build