Interest charges
Revenue will charge interest of 8% per annum if you:
- do not pay your Local Property Tax (LPT)
- pay your LPT late.
Where LPT including any interest remains unpaid, it becomes a charge on the property.
This means you cannot:
- sell the property
- or
- transfer the property
without paying the outstanding amount of LPT tax and interest.
All payments to Revenue for outstanding LPT must include any interest that may be due. Interest is applied to LPT Arrears at the rate of 8% per annum.
If you opted to defer payment of LPT, you must account for the deferral interest at a rate of 4% for outstanding liabilities up to 31 December 2021 and 3% on outstanding liabilities from 1 January 2022 onwards. You must pay deferral interest before you sell or transfer a property.
If the deferral has been claimed incorrectly, you must account for the full interest due at 8% per annum.
Where LPT (including any interest) remains unpaid, it becomes a charge on the property.
This means you cannot sell or transfer the propertyunless you paythe outstanding amount of LPT tax and interest.
Next: Enforcement of LPT
Published: 13 June 2022 Please rate how useful this page was to you Print this page
I'm an expert in taxation, particularly with a focus on property-related taxes, including the Local Property Tax (LPT). My expertise is grounded in a comprehensive understanding of tax laws, regulations, and enforcement mechanisms. I have hands-on experience navigating the intricacies of property taxation systems, including the mandatory deduction at source, LPT surcharges, tax clearance procedures, interest charges, and the enforcement of LPT.
Let's delve into the concepts mentioned in the provided article:
-
Mandatory Deduction at Source:
- This refers to the practice of automatically deducting taxes, in this case, the Local Property Tax, directly from the income or other sources of the taxpayer. It's an efficient way to ensure timely tax payments.
-
Local Property Tax (LPT) Surcharge:
- The LPT surcharge is an additional fee imposed on the Local Property Tax if payments are not made on time. This serves as a penalty for late payments and encourages taxpayers to fulfill their obligations promptly.
-
Tax Clearance:
- Tax clearance is a certification issued by the tax authorities indicating that a taxpayer has settled all outstanding tax liabilities. It is often required in various financial transactions, such as selling or transferring a property.
-
Interest Charges:
- The article mentions an 8% per annum interest charge imposed by Revenue for late payment or non-payment of the LPT. Additionally, there are specific deferral interest rates, such as 4% for outstanding liabilities up to December 31, 2021, and 3% for liabilities from January 1, 2022, onwards.
-
Enforcement of LPT:
- This involves taking legal actions to ensure compliance with LPT payment obligations. The article suggests that unpaid LPT, including any accrued interest, becomes a charge on the property. As a result, the property cannot be sold or transferred until the outstanding LPT tax and interest are settled.
Understanding these concepts is crucial for property owners to avoid legal consequences and financial penalties associated with non-compliance. The enforcement mechanism ensures that taxpayers fulfill their obligations, and the interest charges serve as a financial incentive for timely payments. Stay informed about these intricacies to navigate the taxation landscape effectively.
FAQs
Find the Balance Subject to Interest (BSI).
Take the Balance Subject to Interest, multiplied by the Daily Periodic Rate (in decimal form), multiplied by the Days in Billing Period. The formula is: BSI x DPR x Days in Billing Period = Interest charged.
How would you explain interest charges to a customer? ›
This refers to the sum of interest on your credit card account and it is broken down by transaction type: purchases, cash advances and balance transfers. You will be charged interest if you pay less than the full balance or pay after the payment due date.
Why does my credit card say interest charge? ›
Credit cards charge interest on any balances that you don't pay by the due date each month. When you carry a balance from month to month, interest is accrued on a daily basis, based on what's called the Daily Periodic Rate (DPR). DPR is just another way of saying what your daily interest charge is.
Can you fight interest charges? ›
If you feel that the fees or interest were assessed in error, you should file a written billing error dispute within 60 days of the statement that showed the alleged error. The information on filing a written billing error dispute and the address to which the notice should be sent are listed on your billing statement.
What is 24% APR on a credit card? ›
An annual percentage rate (APR) of 24% indicates that if you carry a balance on a credit card for a full year, the balance will increase by approximately 24% due to accrued interest. For instance, if you maintain a $1,000 balance throughout the year, the interest accrued would amount to around $240.00.
What is an example of interest charges? ›
The daily rate is your annual interest rate (the APR) divided by 365. For example, if your card has an APR of 16%, the daily rate would be 0.044%. If you had an outstanding balance of $500 on the first day, you would incur $0.22 in interest that day, for a total of $500.22 on the second day.
What is the best way to explain interest? ›
Interest is the price you pay to borrow money or the return earned on an investment. For borrowers, interest is most often reflected as an annual percentage of the amount of a loan. This percentage is known as the interest rate on the loan.
What is the best explanation of interest? ›
Interest is essentially a charge to the borrower for the use of an asset. Assets borrowed can include cash, consumer goods, vehicles, and property. Because of this, an interest rate can be thought of as the "cost of money"—higher interest rates make borrowing the same amount of money more expensive.
What is a good interest charge? ›
A good credit card APR is a rate that's at or below the national average, which currently sits above 20 percent. While there are credit cards with APRs below 10 percent, they are most often found at credit unions or small local banks. If you don't have good credit, you're likely to receive a higher credit card APR.
Why am I still being charged interest if I paid off my credit card? ›
Even though you paid off your account, there could have been residual interest from previous balances. Residual interest will accrue to an account after the statement date if you have a balance transfer, cash advance balance, or have been carrying a balance from month to month.
You can reduce or eliminate interest charges by asking your card issuer for an interest rate reduction, move your high-interest credit card balance to a balance transfer card offering a 0% intro APR period or apply for a card offering a 0% intro APR promotion on purchases.
Will a credit card company remove interest charges? ›
Being late on a payment or only paying the minimum amount due will trigger an interest charge, for example. And if you usually pay on-time and in full, the card issuer is likely to grant an interest waiver, as long as their policy allows it.
How do you get interest charges waived? ›
Your bank may consider waiving any late fees or forgoing implementation of a penalty interest rate. Contact your bank to explain your specific situation and to request a fee waiver or maintenance of your current interest rate.
How to get credit card companies to remove interest charges? ›
Do Ask to Speak with a Supervisor. Customer service representatives don't have as much authority to alter an account as their direct supervisors do. If you feel you have a legitimate reason for a lower interest rate yet are denied on your first try, ask to speak with a supervisor to state your case.
How do you fight credit card interest? ›
4 ways to avoid credit card interest
- Pay your credit card bill in full each billing cycle. ...
- Use budgeting apps to track spending and avoid costly debt. ...
- Consolidate debt with a balance transfer credit card. ...
- Consider a 0% APR credit card for purchases. ...
- Tap into savings to pay down credit card debt.
A business interest expense is the cost of interest on a business loan used to maintain business operations or pay for business expenses. Business interest expenses may be deductible if the use of the loan qualifies under tax law.
How can customers avoid being charged interest? ›
If you pay off the whole amount (the balance) owed on the card by the due date, you will not be charged interest on your purchases.
What is the interest charge on a statement? ›
Interest rates
a) Interest rates are used to calculate the amount you're charged for borrowing money. It's shown on your statement as an annual rate. b) Other than purchases converted into an Installment Plan, you can avoid paying interest on purchases shown on your statement if you pay the amount due by the due date.
Why do interest rates matter to us as consumers in summary? ›
When interest rates are high, it's more expensive to borrow money; when interest rates are low, it's less expensive to borrow money.
