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Local Property Tax - Inurement clauses

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  • 26-03-2014 8:12pm
    #1
    Naux
    Registered Users Posts: 335 ✭✭


    Mods please move thread if you feel it's in the wrong forum.

    I applied for and received planning permission for a house in 2008, the house was built and we moved into it in April 2012. As part of the planning permission there was a 7 year inurement clause(ie) I cannot rent or sell the house for 7 years after moving in.

    My question is: Does the inurement clause reduce the value of the property for local property tax purposes? The open market value of my house is greatly reduced because nobody would be able to get a mortgage to buy it(their solicitor/bank would stop them because of the inurement clause. I could only sell it to cash buyers,

    Has anyone come across any info on this type of situation??


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    #2
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,285 Mod ✭✭✭✭The_Conductor


    You could argue it- you'd have to make a case to the Revenue Commissioners though- and to be honest- given the values are only revised every 4 years- any gain you might make, would be short lived. I'd seriously suggest not inviting scrutiny of the property- from one or two things I've heard, you might be pleasantly (or unpleasantly as the case may be) surprised at the valuation Revenue decide to put on the property.


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    #3
    Del2005
    Registered Users Posts: 18,990 ✭✭✭✭Del2005


    Have the majority of houses sold recently not been cash purchases?


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    #4
    Naux
    Registered Users Posts: 335 ✭✭Naux


    You are probably right.......I let sleeping dogs lie and paid the valuation that they sent me....while gritting my teeth of course!!

    There must be quite a few people in rural areas with this same situation. It would be interesting to know if anyone has challenged the Revenue. Ithink it is a case of the councils/revenue wanting to "have their cake and eat it" as they say


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    #5
    Naux
    Registered Users Posts: 335 ✭✭Naux


    Del2005 wrote: »
    Have the majority of houses sold recently not been cash purchases?

    Hence the prices that properties are being bought at. Cash is King!


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    #6
    Del2005
    Registered Users Posts: 18,990 ✭✭✭✭Del2005


    Naux wrote: »
    You are probably right.......I let sleeping dogs lie and paid the valuation that they sent me....while gritting my teeth of course!!

    There must be quite a few people in rural areas with this same situation. It would be interesting to know if anyone has challenged the Revenue. Ithink it is a case of the councils/revenue wanting to "have their cake and eat it" as they say

    Your property is still worth a certain amount, the fact that you can't sell it doesn't mean that it has no value for tax purposes.


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    #7
    Naux
    Registered Users Posts: 335 ✭✭Naux


    Del2005 wrote: »
    Your property is still worth a certain amount, the fact that you can't sell it doesn't mean that it has no value for tax purposes.

    Precisely, it is worth a certain price (ie) market value.......what the market is willing to pay. If you can't sell it then the value goes down until it hits a price where you can sell it. Market Value.

    The inurement clause damages the market value of the house.


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    #8
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,285 Mod ✭✭✭✭The_Conductor


    Naux wrote: »
    The inurement clause damages the market value of the house.

    Not necessarily.
    At present the vast preponderance of buyers are cash buyers- so arguably- the inurement clause is meaningless.
    In any event- its on a sliding scale- so even in a worse case scenario- it has a finite lifespan.


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    #9
    Naux
    Registered Users Posts: 335 ✭✭Naux


    The_Conductor wrote: »
    Not necessarily.
    At present the vast preponderance of buyers are cash buyers- so arguably- the inurement clause is meaningless.
    In any event- its on a sliding scale- so even in a worse case scenario- it has a finite lifespan.

    I know quite a few people that have purchased houses in the last few years with mortgages. Overall you are correct about the majority being cash buyers.

    The inurement clause is not meaningless otherwise such clauses would not exist. It's impact disappears in year 8 alright.

    My comment about market value remains valid though. If you have a house on the market for a year looking for say 305k, it is reduced to 275k after one year to try to sell it, still no takers and it is reduced to 245k after 18 months to try and shift it.

    What property tax would you pay on something like that? I have seen quite a few of those type of scenarios in the past few years as people think their houses are worth more than the market is willing to pay.


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