These are the details of the new Household Charge – a new Property Tax that were announced in Budget 2012 and will be introduced in Ireland from January 2012.

The Bill has yet to be passed into Law – but it was passed in the Dail on Dec 14th.

The 2012 Household Charge amount will be set at E100 a year. The Household Tax will have to be paid before March 31st in each year of liability to avoid penalty charges.

Owners of residential property will be liable for the charge on each residential property they own as at 1st January 2012. Tenants will not have to register to pay the Household Charge.

Billing: No bills or invoices for this household charge will be sent – the charge will be on a self-declaration basis.

The definition of a residential property includes – house, maisonette, flat, apartment, bedsit. So – the owner of a building split into 5 bedsits will be liable for five lots of Household Charge.

A building is liable if it is occupied, or suitable for occupation. An empty house will not be exempt.A property which is let to more than one tenant with exclusive use of a bedroom for each person and joint use of common areas will only be liable for one Household Charge. Registration and payment can be carried out online when the HouseholdCharge.ie website is up and running. There will also be an option to register and pay by post. No other method of payment (i.e. in person) has been mentioned.

The liability date for 2012 will be January 1st 2012 and households will have three months to pay.

Late payment penalties will apply as follows:

Payments made within 3 and 6 months of January 2012 – a 10% penalty.

Payments made between 6 and 12 months late – a 20% penalty.Payments more than 12 months late – a 30% penalty plus 1% interest per month

So – if someone is 12 months late paying the E100 household charge – they will owe E130 plus another E12 interest – a total of E142.

If charges remain unpaid a charge will remain attached to the property

Selling House: A vendor of a residential property must pay any household charge, late payment fee and late payment interest due on the property and give a certificate of discharge, exemption or waiver in respect of each liability date during the vendor’s ownership to a purchaser on or before the sale or transfer can be completed.

Payments- The new charges will be payable as a one off payment online or by post or by quarterly direct debits. No “over the counter” payments are mentioned. There is no E10 fee for over the counter payments (this will apply to NPPR payments from 2012)

The following exemptions from the Household Charge apply: etc.

The following buildings are not defined as residential property and will not be liable for the charge: Buildings that are …• Part of the trading stock of a business and from which no income has been derived since the building’s construction, and has never been used as a dwelling.• vested in certain public authorities;• owned by voluntary housing bodies;• Wholly used as dwellings and liable for commercial ratesAn owner of a residential property is exempt from the household charge if, on the liability date, the residential property is:• Comprised in a discretionary trust;• Owned by an approved charity;• Vacated by the owner by reason of long term mental or physical infirmity.

The following households will have the charge waived:

1. Those in receipt of mortgage interest supplement – (about 18,000 households)

2. Those in certain unfinished housing estates (Estimated to be less than 1300 estates): – which will be on a list prescribed by the Minister for the Environment, Community and Local Government. (List not yet available).

Co-owners of property shall be jointly and severally liable for the charge, and payment of the charge by any one co-owner shall discharge the liability for all the co-owners

The Household Charge is just an interim measure to be put in place until a full property tax system is worked out.

The Household Charge/ Household Tax collected is supposed to be used by local authorities to help fund local services such as fire and emergency services, libraries, street cleaning, lighting, planting etc. Up until now the Exchequer has contributed to the funding of these services, but now some of the funding will be collected through the introduction of this household charge.

The Household Charge is expected to raise about E160 million a year, but there will be costs incurred in administration and collection of the charge.

Article Source: sooperarticles.com/finance-articles/taxes-articles/irelands-household-charge-2012-749539.html

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Find out more about the Irish property market at TopComHomes.com and discover Real Estate investment opportunitiesAuthor: David Clegg