Derelict Properties and the Property Tax

Some property owners may be getting Local Property Tax forms for houses that are uninhabitable – but do they have to pay?

In  the Property Tax legislation the starting point is that all  Residential Property is liable (subject to certain exemptions).

Residential property is defined in the legislation as ” any building or structure which is in use as, or is suitable for use as, a dwelling“

There was some guidance issued for the NPPR by local councils which may also be relevant for the Property Tax.  The guidance said that ..

“In determining if the property is suitable for use as a dwelling, the owner must consider whether the property is habitable or not by reference to the structure of the building. Does the property have a sound roof?

Is it so affected by dampness as to render it unsuitable for habitation? Does it have sanitary facilities?

Does it have hot & cold water? (A water supply that is simply turned off or temporarily disconnected would still be available for use and this in itself would not render a dwelling uninhabitable.)

Does it have an electricity supply connected? If not, when was the electricity last connected to the property?

In order to deem a property unsuitable for use as a dwelling, it would have to meet a number of the above criteria.”

If a property owner deems their property not to be suitable for use as a dwelling  – and they have received a Property Tax form – then they need to contact Revenue and tell them. Revenue may need to see some proof – such as pictures or an engineers report.

The legislation also states that  apart from newly built unsold houses   … “where a property is not a relevant residential property on 1 May 2013 or on the first valuation date for any consecutive 3 year period after the year 2016, it shall not be treated as a relevant residential property until the next valuation date.”

So – if someone buys a run down house and fixes it up after May 1st 2013  – If  is not suitable for use as a dwelling on May 1st 2013 – no property tax will be payable until 2016 .

Of course when the owner  eventually declares the house as a residential property the Revenue may want to know why no Property Tax was paid previously. They may want to see proof  of the state of the house.

If you own a derelict property and have not been sent an LPT1 form – there should be no need to contact Revenue. There is no exemption to claim because the property is not classed as residential. If the house is ever sold here may be a requirement to show that it was not liable for property tax – so it would be advisable to keep any proof such as engineers reports etc.