The Minister for Finance Mr Michael Noonan T.D., today announced that he has extended the scope of reliefs from Local Property Tax (LPT) to certain disabled and/or incapacitated individuals to correct anomalies and inequities. The changes will affect cases where there is no award from a court or the Injuries Board or where no public trust fund was established or where no grant was received from a local authority.
· Currently, subject to qualifying conditions, there is an exemption for certain properties purchased, built or adapted to cater for a permanently and totally incapacitated individual where there is an award from a Court or the Injuries Board or where a public trust fund is established. The Minister has decided that there will no longer be a requirement for an award from a Court or the Injuries Board or for a public trust fund to be established to avail of the exemption, subject to meeting the other qualifying conditions.
· At present, subject to qualifying conditions, a liable person may avail of a reduction in the chargeable value of their property if that property has been adapted for occupation by a disabled person and the adaptation has been grant-aided, or approved for grant aid, by a local authority and that adaptation increases the market value of the property.
· As a result of the Minister’s decision there will no longer be a requirement to have received (or been approved for) a local authority grant to obtain the relief, subject to meeting the other qualifying conditions.
· Revenue will apply these changes from 1st July 2013 when local property tax came into operation. The Revenue Commissioners will shortly publish guidelines in the LPT section of their website www.revenue.ie
Notes for Editors:
Exemption for properties occupied by permanently and totally incapacitated individuals
The Finance (Local Property Tax) Act 2012, as amended, provides for an exemption from the charge to LPT for a residential property in certain circumstances:
· the property must be acquired, constructed or adapted to make it suitable for occupation by a permanently and totally incapacitated individual;
· the property must be occupied by the incapacitated individual as his/her sole or main residence; and
· the permanently and totally incapacitated individual should have received an award from the Personal Injuries Assessment Board or a court, or be the subject of a trust which has been established for the benefit of such a permanently incapacitated individual.
In the case of adaptations to a property, the exemption only applies where the cost of the adaptations exceeds 25% of the market value of the property before it is adapted.
Reduction in chargeable value where property has been adapted to cater for disabled persons
Under the Finance (Local Property Tax) Act 2012, as amended, a liable person may qualify for a reduction in the chargeable value of their property if that property has been adapted for occupation by a disabled person and the adaptation has been grant-aided, or approved for grant aid, by a local authority and that adaptation increases the market value of the property. The person with the disability must occupy the property as his or her sole or main residence after the adaptation is completed.
The reduction in value is limited to the lesser of the chargeable value attributable to the adaptation work carried out on the property and the maximum grant payable under the relevant local authority scheme. The maximum reduction that would be available given current tax rates is €90 per annum. The relief ends on the sale or transfer of a property unless the person with the disability continues to reside in the property.
In some cases, such adaptations on a property may in fact decrease its value which may in turn reduce the LPT liability, effectively making the relief irrelevant