As the Pay & File Deadline approaches, we are bringing you an urgent reminder that you may face a 10% Surcharge on your income tax return if you have not yet complied with their Local Property Tax (LPT) obligations.

This may come as an unpleasant surprise for individuals, and it can be quite onerous, as demonstrated in the examples below. However, there is still time to avoid this LPT Surcharge by making sure that:

  1. File LPT return, and
  2. Pay, or enter into an arrangement to pay, any outstanding LPT and Household Charge before your income tax return is filed.

If these actions are taken before the income tax return is filed, no LPT Surcharge will apply (provided the income tax return itself is filed on time).

1. Client filing an income tax return but also has PAYE income

Take the situation where this taxpayer files his/her income tax return on time but has not filed his/her LPT return. Revenue advises us that this taxpayer will have had the LPT (based on the Revenue Estimate) compulsorily deducted from his/her wages. Notwithstanding this fact, an LPT Surcharge of 10% will also be applied to his/her income tax return, with:

  • no credit for LPT paid through the compulsory deduction at source, and
  • no capping of the LPT Surcharge until such time as he/she files their LPT Return.

2. Clients who have CGT as well as income tax liabilities in their returns

Where a client’s return has both an income tax liability and a CGT liability, Revenue has said that the 10% LPT Surcharge will be applied to both the income tax liability and the CGT liability.

The general rule is that where an LPT Surcharge arises on a return, that LPT Surcharge will be capped at the amount of the LPT liability once the taxpayer subsequently files their LPT return and pays their LPT liability.

However, where an LPT Surcharge arises on a return with both an income tax and a CGT liability, you need to look separately at the income tax element and the CGT element to determine what cap applies. This is a complex calculation and it is best illustrated by way of an example.

Companies filing corporation tax returns where a second tax head is involved, e.g. CGT, will face a similar calculation.


There is still time for you to avoid an LPT Surcharge on your income tax returns, provided you file your LPT return, and pay, or enter into an arrangement to pay, any outstanding LPT and Household Charge well in advance of your income tax return being filed.