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price hike Sheds, extensions, driveways and big gardens will add up to higher Local Property Tax bill 

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Finance Minister Paschal Donohoe has outlined proposals for tax. Photo: Steve Humphreys

Finance Minister Paschal Donohoe has outlined proposals for tax. Photo: Steve Humphreys

Paschal Donohoe and Michael McGrath pictured ahead of the delivery of Budget 2021. Photo: Gerry Mooney

Paschal Donohoe and Michael McGrath pictured ahead of the delivery of Budget 2021. Photo: Gerry Mooney

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Finance Minister Paschal Donohoe has outlined proposals for tax. Photo: Steve Humphreys

Homeowners with big back gardens or driveways will face higher property tax bills under the Government’s revised property tax scheme.

Sheds, garages and extensions will also add to a homeowner’s Local Property Tax (LPT) bill as they revalue their home ahead of the November deadline for the new tax.

Property tax valuations will focus on the price of homes, but they will also take into account up to an acre of a person’s front and back garden, along with any additional structures.

Up to an acre of any land adjoining a house will also have to be factored into valuations submitted to the Revenue Commissioner.

Finance Minister Paschal Donohoe is also planning to change the existing legislation to specify land considered under the valuation must be the part that is most “suitable for occupation and enjoyment with the residence”.

It has also emerged homeowners who qualify for exemptions from property tax will still be asked to send Revenue a valuation for their house by November 1.

The new policy is to ensure a valuation is attached to every house in the country as some exemptions may be removed in the future.

Homeowners who are in care are exempt from property tax but they may sell their house in future years and the new owner will pay the charge based on the valuation from November.

The property tax bands will not be reviewed for another four years and Mr Donohoe signalled that the next government will be tasked with setting new rates.

He also proposed a number of other changes to the local property tax system, which are set out in the general scheme for the new legislation.

One proposal will see institutional investors who lease housing estates to local authorities under lucrative 25 year leases hit with a property tax bill.

At present, local authorities are liable for property tax on homes leased to them for more than 20 years.

Local authorities pay a reduced property tax rate of just €90 a year on each unit in their social housing stock.

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However, the new property tax legislation will see investment companies hit with the bill from next year.

Yesterday, the Department of Finance confirmed investment firms will be forced to pay the full rate of property tax based on the valuation of each house or apartment they lease to local authorities.

Investment companies leasing entire housing estates and apartment blocks to local authorities will be liable for significant property tax bills from next year once the legislation has passed.

The new legislation will also deem controversial co-living developments as properties subject to property tax.

The shared living apartments are a recent phenomenon and were not factored into the original property tax legislation.

Around 640,000 homeowners are set to face increases of at least €90 in their LPT bills as the Government overhauls the system for the first time since it was introduced.

Meanwhile, 100,000 homeowners who were previously exempt from property tax because they bought new builds within the past eight years will get bills for the first time next year.

New homes built since 2013 have been exempt from property tax since the charge was introduced, and the Government has delayed ending the exemption on a number of occasions.

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