Am I liable for LPT in 2025 if I close on buying a new build on Nov 2nd?

Hi all,

Is it wise to ask my solicitor to delay closing on a new build until shortly after November 1st in order to save a few hundred quid on LPT in 2025?

I got the closing statement from the developer on Oct 8th, the only items listed are the 90% cost of the house still owed & the first year's management fee, there is no mention of LPT on it (so no indication that the developer will pay LPT for 2025 and then charge me back for it). I am fortunately not under any immediate pressure to move out of my current accomodation so I can wait a bit if it will save me money in 2025. Thanks

I presume that this means that if you take ownership after 1st November 2024 then you will not be liable for LPT until 2026 based on the valuation at 1st November 2025?
But is it worth it in the greater scheme of things?
Perhaps you'll actually lose out if house price inflation in the next year means that you go into a higher band on 1st November 2025?

As part of the sale, the solicitors will account for this by including a cost where the buyer will pay the LPT tax amount to the seller on a pro rata basis.
The tax is on the property and not the owner, so waiting until after November 1st makes no difference really.

Edit: just noticed the OP was talking about a new build, I was thinking of second hand houses so my post above may not apply.

ClubMan said:

I presume that this means that if you take ownership after 1st November 2024 then you will not be liable for LPT until 2026 based on the valuation at 1st November 2025?

Click to expand...

Thanks for the reply. Sorry if my post is worded poorly.

I was basically asking if I take possession of the new build on Nov 2nd:
* Is anyone liable to pay the LPT for 2025?
* If so, is that person me?

Apologies as well if these are very simple questions or if I'm completely misunderstanding when LPT becomes due (which may be the case trying to read the revenue and citizens info guidance)

If you are the owner of a property on the 1st of November you are liable for the upcoming year. The vendor will have to pay in full before the sale can go through as part of the general clearance process. If you purchase the property on the 2nd of November than you are not liable for property tax on this property until 2026. Hope this helps.

maria88 said:

If you are the owner of a property on the 1st of November you are liable for the upcoming year. The vendor will have to pay in full before the sale can go through as part of the general clearance process. If you purchase the property on the 2nd of November than you are not liable for property tax on this property until 2026. Hope this helps.

Click to expand...

That was my reading of it too, I just couldn't find a straightforward answer like this as it's hard to know how to google it. Thank you @maria88

maria88 said:

If you are the owner of a property on the 1st of November you are liable for the upcoming year. The vendor will have to pay in full before the sale can go through as part of the general clearance process. If you purchase the property on the 2nd of November than you are not liable for property tax on this property until 2026. Hope this helps.

Click to expand...

Yes, but the practice on closing the sale is that these costs are apportioned. If the vendor has paid a tax, service charge, etc, that covers the coming year, and the purchase buys the property during that year and so benefits from the payment made by the vendro, a portion of the payment, representing the part of the coming year that the purchaser will own the property, is added to the purchase price. Similarly, if a liablity has accrued or is accruing but has not been discharged at closing, a portion of that, represent the amount accruing up to closing, is deducted from the purchase price.

The OP will save money by deferring closing until after 1 Nov if the result of deferring closing is that no tax is payable, by either party, on 1 Nov.

TomEdison said:

The OP will save money by deferring closing until after 1 Nov if the result of deferring closing is that no tax is payable, by either party, on 1 Nov.

Click to expand...

I know I'm contradicting what I said in the post just above yours, but this was my other reading of it - if the new property isn't residential on 1 Nov then no tax is liable in 2025.

I'll be asking revenue directly once I've signed just to be sure and can update here