LPT Property Purchased 2016

[Jacko1]

Hi..I have purchased a house in the middle of 2016 and the property tax was paid for the full year by the previous owner.

Is Property Tax like Car Tax,i.e. if i tax a car for a period of time and sell the car before that period is up the new owner has only to tax the car from the new period of tax due.

In my case the house LPT was paid for whole of 2016 and i bought it July 2016,the previous owner demanded refund of 6 months LPT from me and my solicitor said i had to pay before i could complete purchase of property.

 

[rob oyle]

Not sure of the question - whoever owns the property on 1 November of the previous year is liable for the property tax (for the whole year). They can seek repayment from the buyer as part of the house sale process, as your vendor did last July.

 

[Jacko1]

Hi Rob..what i am trying to asertain if is like car tax and i should not have paid the six months LPT to the seller of the house and if that is the case my solicitor should have advised me not to pay it, also it would then be preferable for people to pay there LPT monthly if they are thinking of selling.

 

[Delboy]

I got hit for LPT when getting the keys to my house last April. My Solicitor just added it to my final bill...there was no mention of the seller seeking it- it was just put to me that this was how it went.

 

[Brendan Burgess]

The liability for the LPT in any year falls on the owner as of 1 November the previous year.

So the seller to Jacko paid the LPT for 2016 as he owned the property on 1 November 2015.

The legal profession has agreed, and reasonably so, that the buyer will pay the "unused" bit. So if you buy a house on 1 January, the full LPT will be added to your bill. If you buy it on 1 July, half will be added to the bill.

Brendan

 

[Delboy]

So it's just something that the Legal profession has decided amongst themselves? That hardly seems to be the way to go about making such decisions

 

[Jacko1]

The liability for the LPT in any year falls on the owner as of 1 November the previous year.

So the seller to Jacko paid the LPT for 2016 as he owned the property on 1 November 2015.

The legal profession has agreed, and reasonably so, that the buyer will pay the "unused" bit. So if you buy a house on 1 January, the full LPT will be added to your bill. If you buy it on 1 July, half will be added to the bill.
Brendan

Thanks Brendan that seems reasonable all right, what if i pay LPT monthly would i be expected to continue with my direct debit to end of year or stop d/d and let new owner pay portion due to revenue.

 

[Jacko1]

So it's just something that the Legal profession has decided amongst themselves? That hardly seems to be the way to go about making such decisions

I think i would prefer this whole process to be more transparent as i have no record of the amount been paid to the previous owner.

 

[mf1]

I think i would prefer this whole process to be more transparent as i have no record of the amount been paid to the previous owner.

The whole process is entirely transparent.

At , or usually before, closing, the Vendor provides a printout of LPT paid with a nil balance outstanding - the legislation states that it is the owner of the property on November 1st who has the legal liability for the following year.

This print out is your record of what the previous owner has paid.

In circumstances where a house is being sold, Revenue insist that the entire liability for the entire year is discharged by the person responsible i.e. the registered owner as at November 1st in the previous year. So if payments are being made by direct debit, they cease and the entire outstanding LPT liability is discharged before closing.

"So it's just something that the Legal profession has decided amongst themselves? That hardly seems to be the way to go about making such decisions"

LPT is an outgoing/charge on the property and is properly apportioned between the vendor and purchaser, as with other outgoings, as to their periods of ownership. When you're acting for the vendor, you seek a refund of LPT paid and when you're acting for a purchaser , the balance is added to the purchase price.

It all seems perfectly logical. Her are the Revenue guidelines if anyone wants to review them.

http://www.revenue.ie/en/tax/lpt/guidelines-sale-transfer.pdf

mf

 

[Jacko1]

The whole process is entirely transparent.

At , or usually before, closing, the Vendor provides a printout of LPT paid with a nil balance outstanding - the legislation states that it is the owner of the property on November 1st who has the legal liability for the following year.

This print out is your record of what the previous owner has paid.

In circumstances where a house is being sold, Revenue insist that the entire liability for the entire year is discharged by the person responsible i.e. the registered owner as at November 1st in the previous year. So if payments are being made by direct debit, they cease and the entire outstanding LPT liability is discharged before closing.

"So it's just something that the Legal profession has decided amongst themselves? That hardly seems to be the way to go about making such decisions"

LPT is an outgoing/charge on the property and is properly apportioned between the vendor and purchaser, as with other outgoings, as to their periods of ownership. When you're acting for the vendor, you seek a refund of LPT paid and when you're acting for a purchaser , the balance is added to the purchase price.

It all seems perfectly logical. Her are the Revenue guidelines if anyone wants to review them.

http://www.revenue.ie/en/tax/lpt/guidelines-sale-transfer.pdf

mf

Thanks mf1 i will read the document on revenue web site.

 

[llgon]

The whole process is entirely transparent.

At , or usually before, closing, the Vendor provides a printout of LPT paid with a nil balance outstanding - the legislation states that it is the owner of the property on November 1st who has the legal liability for the following year.

This print out is your record of what the previous owner has paid.

In circumstances where a house is being sold, Revenue insist that the entire liability for the entire year is discharged by the person responsible i.e. the registered owner as at November 1st in the previous year. So if payments are being made by direct debit, they cease and the entire outstanding LPT liability is discharged before closing.

"So it's just something that the Legal profession has decided amongst themselves? That hardly seems to be the way to go about making such decisions"

LPT is an outgoing/charge on the property and is properly apportioned between the vendor and purchaser, as with other outgoings, as to their periods of ownership. When you're acting for the vendor, you seek a refund of LPT paid and when you're acting for a purchaser , the balance is added to the purchase price.

It all seems perfectly logical. Her are the Revenue guidelines if anyone wants to review them.

http://www.revenue.ie/en/tax/lpt/guidelines-sale-transfer.pdf

mf

I don't think those Revenue guidelines cover the issue raised in this thread. I think it is important to bear in mind that LPT is not a charge on the property in the same sense that say a management fee is. As you have said once 1st November passes the liability for LPT for the entire following year rests solely with the owner on that date. I tend to agree with Delboy that it seems to be something the legal profession have just decided amongst themselves.

My opinion would be that if it is not covered in the contracts solicitors have no right to demand a purchaser discharges/refunds a vendor's tax liability at the end of the sales process.

 

[mf1]

I don't think those Revenue guidelines cover the issue raised in this thread. I think it is important to bear in mind that LPT is not a charge on the property in the same sense that say a management fee is. As you have said once 1st November passes the liability for LPT for the entire following year rests solely with the owner on that date. I tend to agree with Delboy that it seems to be something the legal profession have just decided amongst themselves.

My opinion would be that if it is not covered in the contracts solicitors have no right to demand a purchaser discharges/refunds a vendor's tax liability at the end of the sales process.

Wait til you're selling a property and want to apportion LPT so that you don't get lumbered with a whole years LPT when a new owner is living in the house!

"My opinion would be that if it is not covered in the contracts "

We cover it in the contract so that there is no confusion.

mf

 

[Gordon Gekko]

It's nothing to do with Revenue.

Their position is that whoever owns the property on 1 November pays the tax for the following year.

However, quite reasonably, the purchaser repays the vendor through the sale process.

Perfectly fair, and something I myself had to do. It was highlighted by the solicitors and dealt with through the sale process.

 

[Jacko1]

It's nothing to do with Revenue.

Their position is that whoever owns the property on 1 November pays the tax for the following year.

However, quite reasonably, the purchaser repays the vendor through the sale process.

Perfectly fair, and something I myself had to do. It was highlighted by the solicitors and dealt with through the sale process.

I think anyone thinking of selling a property should pay the LPT monthly,when you sell just cancel the d/d and the liability passes to the new owner. You could end up in a situation where a buyer could pull out of the buying process because they feel the LPT has been paid by the previous owner and they no liabilty to revenue for the relevent period the same as when you sell a car.

 

[llgon]

Wait til you're selling a property and want to apportion LPT so that you don't get lumbered with a whole years LPT when a new owner is living in the house!

"My opinion would be that if it is not covered in the contracts "

We cover it in the contract so that there is no confusion.

mf

I would hope to have somebody like yourself on my side who has it covered! The problem I think is that a lot of solicitors do not, unless it is something that has changed recently.

It's nothing to do with Revenue.

Their position is that whoever owns the property on 1 November pays the tax for the following year.

However, quite reasonably, the purchaser repays the vendor through the sale process.

Perfectly fair, and something I myself had to do. It was highlighted by the solicitors and dealt with through the sale process.

Following exchange of contacts some may find it unreasonable to pay somebody else's tax liability if it is not part of the agreement that has been made. But if it has been highlighted by the solicitors and covered in the contracts there should be absolutely no problems. Is this always the case?

 

[roker]

I have sold my house and the house will be handed over 16 Oct ,when I paid last year I have already paid for the period to Jan 2018. When I take possession of my next house it will be sometime later in Nov, is the previous owner expected to pay for the year?

 

[Marsha25]

As far as I know the previous owner should pay as it's still in their possession on November 1st, and you will be refunding the owner the full amount if the sale goes through in November. My dad's house sale went through in December last year. He had paid lpt for 2017 and was refunded the full amount along with the sale price of the house.