Noel Grealish (Galway West, Independent)
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To ask the Minister for Finance if, in regard to local property tax, he will outline the situation that will apply when a taxpayer has declared a particular value in good faith but the property is sold for a higher figure during the period of the valuation and if in that scenario, if any additional local property tax will be charged; the way the reverse situation will be handled whereby a higher valuation does not equate with the realised market value in a sale; and if he will make a statement on the matter. [12342/13]

Michael Noonan (Limerick City, Fine Gael)
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The Finance (Local Property Tax) Act 2012 sets out how the tax is to be administered and how a residential property is to be valued for Local Property Tax (LPT) purposes.

I am advised by the Revenue Commissioners that LPT is a self-assessed tax so in the first instance it is a matter for the property owner to calculate the tax due based on his or her assessment of the market value of the property. As property values for properties under €1 million are organised into valuation bands for the purposes of LPT, property owners will not be required to provide a precise value for their property.

I am further advised by the Commissioners that the initial valuation of a property on 1 May 2013, assuming it is made in good faith, will be valid up to and including 2016 and will not be affected by any increase or decrease in property prices, during this period. This will ensure a measure of certainty for all property owners.

The Revenue Commissioners have prepared valuation guidance which, taken together with the owner’s own knowledge of the property, will assist him or her in assessing its value. The guidance includes an on-line guide that provides indicative property valuation bands depending on the property type, age and location and is available on the Revenue website.

When using Revenue’s valuation guidance, property owners should consider the specifics of their own property and if they feel that the guidance is not indicating a reasonable valuation, they should make their own assessment. As I have previously advised the House, where the Revenue guidance is used in an honest manner, the property valuation made by a property owner will not be challenged by Revenue in accordance with its normal Customer Service Charter and, consequently, additional charges will not be applied.

Noel Grealish (Galway West, Independent)
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To ask the Minister for Finance if any outstanding amount of local property tax in a repossession or forced sale scenario will rank higher for payment purposes than an outstanding mortgage when the realised sale price is insufficient to fully discharge a mortgage liability; and if he will make a statement on the matter. [12343/13]

Michael Noonan (Limerick City, Fine Gael)
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Under the Finance (Local Property Tax) Act 2012, unpaid Local Property Tax (LPT), together with any accrued interest, will be a charge on the property to which it relates. The Act does not confer any preferential creditor status on the Revenue Commissioners, other than that which they would have in the normal course of events. The usual rule is that the priority of a Revenue charge vis-à-vis other parties who also have a charge on the property will depend on the timing of the various charges. Therefore, in the event of a repossession or forced sale of the property, the proceeds must be used to discharge charges in the order in which those charges arose. The Revenue Commissioners will only have preferential creditor status over a mortgage provider where the LPT liability was due and payable before the mortgage provider advanced a loan in respect of the property. On that basis, unpaid charges for LPT should not have an effect on currently outstanding mortgages.