Revenue has said that modular homes built in back gardens will be subject to Local Property Tax in addition to the property tax charge on the principal residence.
The tax authority told the Chief Executive of the Institute of Professional Auctioneers and Valuers, Genevieve McGuirk that it is its intention to pursue separate property tax payments for both the principal residence of the homeowner and any modular home in the back garden, the Irish Times reported.
The Revenue says that if a structure on the grounds of a property is permanent in nature and suitable for use as a separate dwelling then a separate LPT charge may apply.
The Government has moved to exempt modular homes in back gardens from planning permission requirements in a bid to tackle the ongoing housing crisis. Modular units of up to 40 square metres can be built behind existing homes without seeking planning permission – and homeowners can earn tax-free rental income of €14,000 annually on that structure.
However, the modular home will not be exempt from Local Property Tax, Revenue says.
In a statement to Ms McGuirk 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.”
The valuation of such a structure for property tax purposes may then include site costs in addition to construction costs.