People who underestimate the value of their property are “foolish”, the Personal Finance Editor of the Irish Independent has said. 

Despite rising property values, over half a million people believe their property is worth less than €200,000 and thus paid €90 in local property tax. 

All of which has raised suspicions that the system of self-assessment is causing the State to raise less money than it is due. 

“What’s emerged is that the figures that Revenue put on its website on 5th January, 360,000 people went with an estimate that was less than Revenue thought the property was worth,” Charlie Watson told The Pat Kenny Show. 

“Even though we’re still seeing property prices rise. 

“It just raises some suspicions, are people gaming the system?” 

Polls have found that the tax is widely unpopular and it is possible that this has influenced how people carry out their self-assessment. 

“I think people are foolish if that’s what they’re at,” Mr Watson said. 

“It’s not a wise thing to do because Revenue have resources, they have incredible powers to come after you if you’re not playing fair with them. 

“They can take the money out of your salary if you don’t pay it for example. 

“If you undervalue the house, for example, and they think there’s money owed, they can impose an interest rate of 8%, they can impose penalty points. 

“They can refer that debt to a sheriff for collection… You really do not want to be getting on the wrong side of them.” 

Last year, the Local Property Tax raised €500 million in revenue for the State.

Main image: Tax demand letter from Revenue.