Revenue seeks clarity on Local Property Tax for modular and garden homes

Ken Foxe

Revenue officials said they needed a “clear position” on whether modular homes and garden dwellings should be subject to Local Property Tax amid uncertainty over how rules applied to them.

In internal discussions, the Revenue Commissioners said there was no published guidance referring specifically to modular homes or similar properties even though they were “becoming very common.”

Garden homes of up to 45 square metres – colloquially known as ‘shed sits’ – are to be exempted from planning permission as part of government plans to increase housing supply.

Revenue records detail how there was “ambiguity” over whether some buildings not permanently attached to the ground came within the definition of residential property.

An internal email said there were certain types of structures that were not classified as residential properties even if used as a dwelling.

This included mobile homes, shipping containers fitted out as accommodation, houseboats, caravans and camper vans.

However, the picture was less clear-cut for modular homes in gardens, a senior official said.

A message said: “The advice attached suggests that, while ‘structures’ which are not permanently attached to the ground are excluded, buildings in their own right, whether permanently attached to the ground or not, come within the meaning of a ‘residential property’, but there is some ambiguity around this point.

“There is also ambiguity around whether modular homes are permanently attached to the ground, but they do have a degree of permanence.”

Revenue said in one case where a taxpayer had claimed a type of prefab building was not subject to Local Property Tax (LPT), officials had disagreed.

They told the person the property had been declared as his main residence, was subject to LPT, and “the onus was on him to prove otherwise.”

An email conceded existing guidance language was “confusing” and there was no case law to fall back on for definitive answers.

Another message to the Department of Finance from April this year said cases would have to be assessed based on “individual facts and circumstances.”

Asked about the discussions, a Revenue spokesperson said legislation on Local Property Tax made clear that it applied to “any building which is in use as, or is suitable for use as, a dwelling.”

They said the law excluded a structure that was “not permanently attached to the ground.”

The spokesperson said: “Part of a building or a structure permanently attached to the ground and that is immoveable can be a residential property in its own right, and a building can contain a number of different residential properties for the purposes of LPT.

“Many property owners have garages, greenhouses, and other structures on the site of their home which should be included when the property owners are making a true assessment of the correct value of the property.”

They said if a modular home was permanently attached to the ground and suitable for use as a separate dwelling, a separate Local Property Tax charge “may apply.”

The spokesperson said: “It should be noted that LPT is a self-assessed tax and the treatment for LPT purposes will depend on the application of the legislation to the facts and circumstances of each case.”