Sale agreed - When and who pays LPT
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PebbleBeach2020
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whoever owns the property on 1st November is liable for the property tax the following year.
We bought our house a few months back and we paid our share of the lpt for the percentage of the year we owned the property to the vendors when we paid the rest of the purchase amount. I would assume you’re only liable for the share of the lpt from when contracts are fully signed not from when you’re sale agreed.
Thanks and then presumably the buyer reimburses me for the portion of the year they own the property for, as per @Bilbo1 ?
And this is all done through the conveyancy process?
Thanks.
Interesting. Yes contracts are now fully signed. Just waiting to close. Ill check with my solicitor Saul.
Ah right, so the house is 'sold' as they say in the EA world.
As @PebbleBeach2020 said above whoever owns the property on the 1st of November is liable for the LPT for the forthcoming year.
However, also stated above is that it 'is usual' for the purchaser to re-imburse the vendor on a pro-rata basis.
AFAIK this is a loose arrangement and is generally not in any contract, but nevertheless it is common and more or less expected.
Thanks @SparkRite
Contracts signed but theyve a clause included re bank finance i.e contract not effective until bank approves drawdown. Also as we have not yet "closed" and I have not received funds - in this scenario is the house still considered sold as of right now?
Contracts signed but theyve a clause included re bank finance i.e contract not effective until bank approves drawdown. Also as we have not yet "closed" and I have not received funds - in this scenario is the house still considered sold as of right now?
Usual condition.
Personally I would not consider anything 'sold' until I receive full payment for it, however in the EA world a property is considered as sold on exchange of contracts. This is evident by their signage, give them a few grand as deposit - up goes 'Sale Agreed', on contracts being signed - up goes 'SOLD'.
However the conveyance of title only takes place after transfer of all due funds and 'closing' of contracts.
I've just exchanged contract on a house purchase and there's a line item in for LPT however it seems quite high. Im going to check with solicitor but can someone explain how this works? Closing mid November.. Preferably I'd like to pay through payroll rather than a lump sum, but it looks like I may be expected to pay remainder of 2021 + 2022 now ..
@dubdub123 The vendor is liable to pay/has paid both 2021 and 2022. They will need you to reimburse them for both. Paying through payroll is not really doable in the year of a sale - and if the sale is completing this late in the year it will have to cover the following year too. I saw a case a couple of years ago where the vendor was paying through payroll (against his solicitor's advice, began after putting the house on the market) and only half of the LPT was paid at the closing date so the solicitor had to withhold the purchaser's portion until the vendor could show his P60 showing the total amount paid. (I could write a book about that particular fellow!)
There was a direction by The Law Society that the normal way to deal with LPT in a conveyance is to calculate the number of day for which the vendor was liable but the purchaser will be in possession of the house.
It is open to negotiation, like the purchaser agreeing to pay management fees arears or similar, but the opening position is as above.
There was a direction by The Law Society that the normal way to deal with LPT in a conveyance is to calculate the number of day for which the vendor was liable but the purchaser will be in possession of the house.
It is open to negotiation, like the purchaser agreeing to pay management fees arears or similar, but the opening position is as above.
Ok thank you. So I should have to pay again approx November 2022 would that be it (for the following year)?
Do you know whether the sellers use the sale price to calculate next years LPT ?
I have no idea why you think you would be liable for LPT for 2021 ?
It is paid in advance, so the LPT due for 2022 should be paid by 7th Nov. 2021.
You are expected to reimburse the vendor on a pro-rata basis, as he/she will have to have LPT up to date to sell the property.
So, say you close the 14th Nov. then you will be expected to pay 51 weeks and then next Nov.7th you will pay the full year for 2023 and so on.....
LPT is due per calendar year so you would pay for 7/52 for 2021 and all of 2022.
The liability date is 1 November every year. November is the date before which you have to value your house, just this year.
If paying in one lump sum the payment is due by March 2022.
The confusion arises if the house is being sold because the purchaser can't trust the vendor to pay it next March for a house he no longer owns but the liability is on whoever owned it on November 1st. The simplest way to deal with the different dates is for the owner on November 1 to pay it in full and the purchaser to reimburse.
The liability date is 1 November every year. November is the date before which you have to value your house, just this year.
If paying in one lump sum the payment is due by March 2022.
The confusion arises if the house is being sold because the purchaser can't trust the vendor to pay it next March for a house he no longer owns but the liability is on whoever owned it on November 1st. The simplest way to deal with the different dates is for the owner on November 1 to pay it in full and the purchaser to reimburse.
if you own the house on November 1st 2022 you will be liable for 2023 which you can pay over the course of the year if you wish (through payroll)
the value as at november 1 must be declared by november 7 which will be the value for the next 3(?) years
Yep, you're right, don't know what I was going on about.
I was mixing up the valuation final date (7th Nov.) with final payment date. Doh.
Lambchops65
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I am going through this at the moment. I am selling, renting and purchasing homes ( 
)
I have gone sale agreed on the property I am selling but awaiting contracts etc to be signed.
The 2 dates they seem to look at LPT are 01 May and then again 01 November.
What I have been advised to do by my solicitor is pay the LPT before the 07 November deadline and then after the sale closes I will be prorated money back.
I am also in the process of trying to get exemptions on said property for some previous years LPT. It was my parents home and was vacant due to nursing homes/deaths and the house didn't go into my name until January this year. Revenue are obvs up to their eyes so still awaiting exemptions...
)I have gone sale agreed on the property I am selling but awaiting contracts etc to be signed.
The 2 dates they seem to look at LPT are 01 May and then again 01 November.
What I have been advised to do by my solicitor is pay the LPT before the 07 November deadline and then after the sale closes I will be prorated money back.
I am also in the process of trying to get exemptions on said property for some previous years LPT. It was my parents home and was vacant due to nursing homes/deaths and the house didn't go into my name until January this year. Revenue are obvs up to their eyes so still awaiting exemptions...