Purchasing a house and LPT payment for 2014

We are due to close on a house sale in the next few days. The vendor has paid the property tax for 2013 and they have signed up to pay single debit authority for the property tax in march 2014 as they are liable.

We are exempt from paying property tax until end of 2016 as first time buyers during 2013. Our issue lies in the fact that the law society states that vendors have to pay up in full the property tax for 2014 before the house is sold. I spoke with revenue and there is a conflict of information here in that they say the vendor only needs to pay for 2013 and it is enough that they have setup the single debit authority for 2014.

Does anyone have experience of this over the last few weeks and what the outcome was? This lpt revenue debacle is causing a lot of confusion! My concern here is that the vendor will just change the single debit authority before march and then the debt will lie with us (the new owners) even though we are exempt...

Hi Peloton

What does your solicitor say?

My understanding is that the LPT must actually be paid in full before the property is sold. It is not enough to set up a Single Debit Authority.

It seems clear to me from the Revenue website, that they must actually pay it before closing

1.3 What happens if I have any unpaid LPT or an outstanding Return on the property?
Before the sale of a property is completed, you must file any outstanding LPT Returns and pay up-front any unpaid LPT due, including any accrued interest and penalties. This includes any LPT that has been deferred by you. If you are paying the LPT liability in instalments over the year, you are required to pay the outstanding balance prior to completion of the sale.

Click to expand...

It could be argued, that the LPT for 2014 is not due until 1 January.

Hi Brendan. My solicitor was going by the law society which stated that it must be paid in full before the sale of the property but the vendor rang revenue and they were told by revenue that this is not the case. I rang revenue myself and I was told the same thing by them that the vendor does not have to pay before close of sale. The law society drew up their draft from responses from revenue as far as I'm aware.

So there is a bit of a stalemate at the moment with the vendors solicitor saying that they don't have to pay before the sale of the property but my solicitor is trying to get them to pay it. On the contract we agreed that we would not pay any apportioned amount of property tax either. My main worry is that come March next year we will have to deal with it because my presumption is that the debt will follow the purchaser of the property. The vendor could easily change their account details on the single debit authority or remove it completely after the sale of the property.

Hi Peloton

The big risk to you is that they will delay closing the sale until 2014.

If your solicitor is happy to do the deal before 31 Dec, then you should go ahead. Though I doubt if your solicitor will be happy

Brendan

sahd said:

Revenue will only be able to chase the liable person for any unpaid LPT ( The vendor was liable on the 1st Nov ) Thay cannot pass the debt on to you if you have proof of when you bought the house.

Click to expand...

Are you sure about that? I thought this tax attached itself to the property. Like rates used to do.

Hi Pelothon ... just wondering how this worked out for you ? We are in the same boat as you trying to get a sale closed before the end of the year. The vendor is willing to pay the tax for 2014 but there is no time left now to be messing with solicitors trying to negotiate it back as part of the contract of sale. Does anyone know if the vendor is due a refund from the revenue if they go ahead and pay it ?

baj2005 said:

Does anyone know if the vendor is due a refund from the revenue if they go ahead and pay it ?

Click to expand...

The vendor owned the property on 1 November 2013.
Therefore they are liable in full for the LPT for 2014
No, they are not entitled to a refund.

Thanks Brendan for the swift reply.

I think we might incentivise the vendor to get it paid and have his solicitor close out the sale fast by offering to refund the amount to him personally. If we can get it done before Christmas then everyone wins.

baj2005 said:

I think we might incentivise the vendor to get it paid and have his solicitor close out the sale fast by offering to refund the amount to him personally..

Click to expand...

I think that is a practical and fair solution to a very complex and unfair situation.

Tax Assessment fee coupon

Home prices are falling everywhere, but homeowners hoping for lower property taxes may find themselves disappointed when the bill arrives.

If you think your home's assessed value is too high, you can appeal the tax assessor's verdict -- We will handle the grievance process for you.

Most homeowners simply don't have the time to appeal, or they become intimidated by all the paperwork involved.

We will help in the appeal process typically charge a small fixed amount. If the appeal is successful, the homeowner can save hundreds of dollars in taxes.

To get discount on appeal process fee, checkout here: www[dot]coupontax[dot]com

LPT in 2014 for FTB

Hi,

Can anyone advise if I need to pay the local property tax related to 2014 as a first time buyer purchasing in 2014?

My solicitor advised that the vendor would pay the portion related to the period in which they owned the property in 2014 and that I would be liable for the remaining balance related from the date ownership of the property is transferred to me.

In practice, he stated that the vendor would pay for the full year and I would refund the vendor.

My understanding is that I would be exempt from local property tax till 2016 as a first time buyer. Can anyone advise?

Thanks

The exemption was only for buyers in 2013, there is no exemption this year.

Lpt 2014

Info according to Revenue:

Sale / transfer of ownership of residential property
If you (as an owner) sell or transfer ownership of your residential property after 1 May 2013 you are still liable to LPT for 2013 and the liability is payable in full at the time of the sale. This includes any LPT that has been deferred by you.
For Local Property Tax purposes, the liability date for 2014 is 1 November 2013. Whoever owns the residential property on 1 November 2013 will be responsible for paying the tax for 2014. If you (as an owner) sell your residential property after 1 November 2013 you will be liable to pay LPT on the property for 2014, even if it is sold before the end of 2013

The Vendor pays it and the purchaser refunds the vendor all the LPT apportioned to the period after the closing date. There will be a condition in the contract to this effect.

Your vendor will not sell to you if you are insisting that you won't pay your share. He'll find someone else who will agree to shoulder their share.

mf

The Vendor pays it and the purchaser refunds the vendor all the LPT apportioned to the period after the closing date. There will be a condition in the contract to this effect.

Your vendor will not sell to you if you are insisting that you won't pay your share. He'll find someone else who will agree to shoulder their share.

Click to expand...

But the liabilty is for the person who owned the property in Nov 13. Are you saying if a person buys this year that they will have to pay back the vendor pro rata ?