Brendan Burgess
Founder
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Certain properties will be exempt from LPT.
- New and previously unused properties that are purchased from a builder or developer between 1 January 2013 and 31 October 2016 will be exempt until the end of 2016.
- Properties purchased by a first time buyer between 1 January 2013 and 31 December 2013 will be exempt until the end of 2016. The exemption is subject to certain conditions, including that the property must be the person’s sole or main residence. If the property is subsequently sold or ceases to be the person’s main residence between 2013 and 2016, the exemption no longer applies.
[2. 7] First-time buyers
1. Introduction
This exemption from local property tax (LPT) applies to residential properties that are purchased by ‘first-time buyers’ who lost out as a result of the termination of mortgage interest relief. However, the effect of an error in the drafting of the legislation is that anybody who purchases a property in the period 1 January 2013 to 31 December 2013 can claim the exemption. Thus, the exemption is not restricted exclusively to ‘first-time buyers’.
Properties bought in the period 1 January 2013 to 1 May 2013 by ‘non first-time buyers’ who filed a return and paid LPT for 2013 as they did not realise that the property was exempt are entitled to a refund of the tax paid. Revenue will be contacting those concerned as soon as possible.
This will create a headache for many sellers in 2013
If Mary sold a house to John on 1 July.
Mary owned the house on 1 May so she paid the 6 month's liability, say €500.
Most conveyancing contracts apportion the LPT, so John paid Mary €500 extra as part of the closing.
Now it turns out that John had no liability so Mary should give him the €500 back.
This will create a headache for many sellers in 2013
If Mary sold a house to John on 1 July.
Mary owned the house on 1 May so she paid the 6 month's liability, say €500.
Most conveyancing contracts apportion the LPT, so John paid Mary €500 extra as part of the closing.
Now it turns out that John had no liability so Mary should give him the €500 back.
So this probably means that those selling in 2013 might be hit for a full year's 2014 tax when they might not actually own the property for any part of 2014. This will apply to anyone selling after 1/11/2013 as they will have the tax liability for 2014, and will have difficulty getting it back from the purchaser who has no liability. Surely the revenue must set this right?
I have had an interesting conversation with Revenue re exemptions for LPT. They are insisting that any person who bought a property in 2013 is exempt from LPT until 2017 (or more specifically end of 2016) - there is no requirement for the purchaser to be a first time buyer.
The property must be your PPR and you must not own other properties.
Where is the "must not own other properties" bit come from? Bizarre
Hi constellar
Obviously the buyers are correct in not paying you a tax for which they have no liability.
Did you try to get the deal done before the 1 November? Then no one would have had a liability for the tax.
brendan
I would have liked the deal to be done weeks ago but waiting for bank to confirm mortgage approval of buyer, and either way no knowledge of this situation by myself or buyer until now. Was it common knowledge before this?
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