Q I bought, and moved into, my first home at the start of the year. It is a newly built property. My father tells me that for the purposes of Local Property Tax (LPT), I need to declare the property to the Revenue Commissioners this November. I thought the property was exempt from LPT because it’s newly built?
A Your father is right. Your home is liable for Local Property Tax and so, you must file your LPT return by November 7, according to the consumer tax manager with Taxback.com Marian Ryan.
You do not have to pay your LPT bill by November 7. You can wait until the New Year to do so. You may be getting confused with an exemption which was previously in place for buyers of new homes. New and previously unused properties bought from a builder or developer between January 1, 2013, and October 31, 2021, were exempt from LPT, Ms Ryan said.
This exemption is no longer available. When filing the LPT return for your home, you will need to determine the value of your property as if it had existed in a complete state as at November 1, 2021, even if it had not been fully built by then, she said.
The date that you need to pay your LPT bill will depend on how you intend to pay it. January 10, 2023, for example, is the date that you must pay your bill if you plan to pay it in full by cash, cheque or debit or credit card.
You can spread your LPT bill out over 2023 either but you need to let Revenue know by December 2 this year how you plan to do so.
Q High winds took the roof off my house during a bad storm, causing major structural damage. When I went to make a claim, my insurer told me that it would not foot the entire bill for repairs. It said I had underinsured my home by about 30pc. I have to foot at least €15,000 of the bill myself as a result. Surely this can’t be right?
A Many homeowners might only get a fraction of the payout they expect from their insurer this autumn and winter as they have, unknowingly, underinsured their homes. This is largely as a result of rising building costs, according to Paul Walsh, the chief executive of Peopl Insurance.
What seems to have happened in your case is that the buildings sum insured, which is the most your insurer will pay in the event that your home is damaged or destroyed and needs to be rebuilt, is too low.
An insurer reduces its liability for the damage to a home in proportion to the amount of under-insurance
Perhaps you have only insured your home for €280,000, but the actual cost of rebuilding it is €400,000. If this is the case, your insurer may reduce the cover for any claim by 30pc, regardless of the size of the claim.
This is because there is usually an average clause built into house insurance policies, where an insurer reduces its liability for the damage to a home in proportion to the amount of under-insurance, Mr Walsh said.
With insurers, all rebuilding costs within a set range are charged at the same rate. So you could find that it will cost you little or nothing extra to increase the rebuild value of your home on your house insurance policy, he said.
Q I started to save for a house a few years ago but the most I ever seem to build up is €1,000. I never borrow for things like car insurance, car tax or a holiday, but that means I end up dipping into my house savings for those expenses. How can I build up my house savings better than I have to date?
A It is good that you don’t borrow to pay for things like holidays and car tax, says Stephen Rice of Aviva Life and Pensions.
He suggests taking a three-pronged approach to your savings so that long-term goals (such as your pension or children’s education) are ring-fenced in a life assurance savings plan, while savings for medium-term goals (such as a house) is set aside in a fixed-term or notice savings account, with an instant access account then used for short-term goals.
Avoid the temptation to make your current account your easy-access account, Mr Rice advises.
Set realistic targets on how much you can afford to save
It will be easier for you to save for short-term goals if you have that money in a separate account to the one your day-to-day bills are paid from. Set realistic targets on how much you can afford to save by looking at your day-to-day expenses and how much disposable income you have.
Once you decide on a level of savings you are comfortable with, then decide how much you want or need to put into each of the three buckets.
As your circumstances may change, it is important to review your savings annually to ensure they remain in line with your objectives.