What happens down the road when property tax is not paid and the house is inherited?

I understand that you can defer your property tax but in the process you have to pay some sort of interest, possibly 4% on the sums involved until it is paid?
If a person decides to do this and the arrears build up to a substantial amount over a number of years and when the property is inherited by the next of kin, is CAT paid on the gross value of the property or on the value of the property after the accumulated property tax has been paid?

Is this not getting over complicated?

Would it not be easier for the next of kin just to assist in paying the LPT now?

Have you reviewed the website? Deferral is not a choice. It has to be approved by Revenue after an application.

http://www.revenue.ie/en/tax/lpt/deferring-payment.html

Or is this a complicated way of trying to reduce the value for CAT purposes?

mf

O.K. Supposing the Revenue accepts deferral. Do you know the answer to my question? Thanks.

Without looking into it on too much detail, CAT is calculated on the value of the property. While outstanding tax liability might be attached to the property, I don't believe that will affect the actual value.

Kimmagegirl said:

I understand that you can defer your property tax but in the process you have to pay some sort of interest, possibly 4% on the sums involved until it is paid?
If a person decides to do this and the arrears build up to a substantial amount over a number of years and when the property is inherited by the next of kin, is CAT paid on the gross value of the property or on the value of the property after the accumulated property tax has been paid?

Click to expand...

You need revenue agreement to sell
http://www.revenue.ie/en/tax/lpt/sale-transfer-property.html#section2

http://www.revenue.ie/en/tax/lpt/personal-representative.html
shows there is a three year additional deferment on death.
However the two taxes are separate and the CAT will be charged on the gross valuation, not net of LPT.
If the rollup is long enough then it may consume enough of the value of the property so as the leave the beneficiaries, if not enough of them in a bind vis a vis having the cash to pay their CAT

What I don't know is if the 4% is simple or compound, hopefully it is.

I'd agree with irocha.

Property tax is separate from CAT.

It's not even a deductible expense from rental income. However the revenue.ie website references the government has accepted the recommendation for same in the Thornhill report (allowing it as a deduction) but has yet to approve same - due to budgetary constraints - when will the never be budgetary constraints!!!