Homeowners who build modular homes in their back gardens will be liable for the payment of another local property tax (LPT), Revenue has said.
While the Government plans to include modular homes in the rent-a-room tax exemption under which homeowners can earn up to €14,000 a year in tax-free rental income, they will be treated as independent structures and assessed accordingly for taxation purposes, The Irish Times has learned.
Confirmation of the tax authority’s intention to pursue the collection of separate LPT payments for both the homeowner’s principal residence and the modular home in their back garden was provided to the chief executive of the Institute of Professional Auctioneers & Valuers (Ipav), Genevieve McGuirk, when she asked Revenue last week to clarify its position on the matter.
In a statement it said: “Many property owners have garages, greenhouses, modular cabins and other structures on the site of their home, all of which should be included when the property owners are making a true assessment of the correct value of the property.
“However, if one of those structures on the grounds of the property is permanent in nature and is suitable for use as a separate dwelling in its own right, for example a garage converted into an area that can be used as a dwelling, a separate LPT charge then applies to that structure as it constitutes a property liable to LPT.
“Similarly, a modular home that is in use as, or is suitable for use as, a dwelling, will be liable to LPT in its own right and required to have its own property ID and be valued independently.”
While property industry experts have estimated that a high-quality modular home could be constructed for about €100,000, the value of the back-garden site is likely to have a more significant bearing on the amount due for such a structure under the LPT.
Local property tax is charged in progressive bands, with homes valued at between €1 and €240,000 billed, for example, at €95 a year, rising to €235 a year for homes valued between €240,001 and €315,000.