Residential Property Tax
Residential property tax was an annual tax chargeable on the market value of residential property owned and occupied on a valuation date which is 5 April each year.
Market Value Exemption Threshold 5 April 2006
The Market Value Exemption Threshold 5 April 2006 is €1,389,000. While Residential Property Tax was abolished with effect from 5th April 1997, a Clearance Certificate procedure remains in place in relation to the sale of certain residential properties to assist the Revenue Commissioners to collect outstanding tax.
The value threshold relating to the Residential Property Tax Certificate of Clearance has been increased to €1,389,000 in accordance with the "indexation" provisions in the legislation (Section 100 Finance Act 1983, as amended).
The new threshold, which relates exclusively to the tax clearance procedure, applies to house sale contracts executed on or after 5th April 2006. From that date, where the sale consideration for residential property exceeds €1,389,000 the vendor must provide the purchaser with a Certificate from the Revenue Commissioners indicating that all Residential Property Tax due for years for which the tax was in operation has been paid. In the absence of the certificate the purchaser is obliged to withhold a specified amount from the sale consideration and remit same to the Revenue Commissioners (Section 110A Finance Act 1983, as amended).
Rates
The tax was charged at the rate of 1.5% on the excess of the market value of all relevant residential properties of a person over a market value exemption limit and was payable provided the income of the household exceeded an income exemption limit. The tax was abolished with effect for all valuation dates beginning on or after 5 April 1997.
Certificates of Clearance
Section 118 amends section 110a of the Finance Act 1983 to Abolish the Clearance Certificate Scheme for sales of residential property completed on or after 1 February 2007.
A Clearance Certificate will no longer be required for contracts dated on or after 1 February 2007 or for contracts dated before I February 2007 where the sale is to be completed on or after 1 February 2007.
Residential Property Tax was abolished with effect from 5 April, 1997. However, the tax clearance arrangements in the case of sales of houses above a specified value threshold have been maintained. The value threshold which relates exclusively to the tax clearance procedure, is £138,000 in 1998 and applies to house sale contracts executed on or after 5 April, 1998.
Overview
Since 1 August, 1993 any person selling a residential property valued in excess of the market value threshold (£138,000 in 1998), must provide the purchaser with a certificate from the Revenue Commissioners indicating that all Residential Property Tax due for years for which the tax was in operation has been paid. Otherwise, the purchaser is obliged to deduct an amount from the purchase price and remit it to the Revenue Commissioners.
The amount to be deducted is 1.5% of the difference between the sale price and the market value exemption limit multiplied by the number of years that the vendor has owned the property, up a maximum of 5 years.
Further information
CapitalAuditAndAccountsDistrict,
85-93LowerMountStreet,
Dublin2,
Ireland.
Telephone01-6474591
Fax:01-6474679
E-Mail: dublinrpt@revenue.ie