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290,000 homes get warning letters over failure to pay property tax bills

Tax officials have written to thousands of homeowners who failed to pay their property tax this year.

The warning letters have been sent to 290,000 homeowners, with many of those who fail to respond set to have the tax forcibly taken from their salaries and pensions.
Just 90pc of homeowners paid the tax on time.

Brian Keegan, director of taxation at Chartered Accountants Ireland and author of a book on property tax, said the uncertainty over water charges may be affecting payment levels.
“The current uncertainty around water charges has implications for voluntary compliance with other forms of taxes and Government levies like local property tax (LPT), but Revenue has a lot of power to enforce LPT collection,” he said.

Tax officials insisted the level of compliance would shoot up when the letters start arriving and once the mandatory deductions start to flow.
Up to now the compliance rate was between 96pc and 97pc for paying property tax.

However, Revenue insisted that in the past compliance rates have fallen to 90pc, before warning letters prompted higher levels of payments.
The information was obtained by Fianna Fáil’s finance spokesman Michael McGrath from Finance Minister Michael Noonan in a Dáil question.

Mr Noonan said in his reply that “compliance in respect of 2016 local property tax currently stands at 90pc”.
Now this is expected to rise given 290,000 compliance letters have gone out since the middle of last month.

“I am also advised by Revenue that debt collection/enforcement action, including deductions from salaries and pensions, is under way against property owners who failed to respond to the compliance letters within the timeframe allowed,” Mr Noonan said.
Suggestions that the water charge protests have prompted a new move for people to stop paying their property tax were dismissed by Revenue.

A spokeswoman for Revenue said in May last year the compliance rate fell to 94pc, and was as low as 90pc in May 2014.
Tax officials expect the numbers paying the tax to surge when people read the warning letters.

“Revenue is satisfied that the compliance rate for LPT [local property tax] for 2016 will be in line with previous years.
“Revenue also encourages those property owners who have received a compliance letter to pay or make payment arrangements as soon as possible to avoid enforcement action.”

It was working off a register of 1.95 million properties.

If there is no property tax return from a taxpayer, Revenue can deduct the tax due from salaries, pensions or social welfare.
Revenue will not issue a tax clearance certificate for the self-employed where there is an unpaid bill.

Where property tax remains outstanding, a charge will attach to that property, and it must be paid when the property is sold.

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