# Repossessed house, outstanding taxes



## Time (10 Mar 2014)

If a bank repossesses a house from a person who has not paid the household charge or LPT on it, who is liable for the tax? The bank who has now got possession or the former owner?


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## so-crates (10 Mar 2014)

Surely it would depend on when it was due, similar to a sale? If it was due at the point it was possessed by the bank then the prior owner would still be liable?


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## Bronte (10 Mar 2014)

The bank will have to pay up all outstanding NPPR etc. Otherwise the house cannot be sold. It's not really a question of who is liable, this charge attaches to the property, rather than the person, so a potential purchaser, via his solicitor will ensure that it is paid prior to transfer. You only have to look at the Allsop's auctions to see where in each sale the backdated NPPR is paid by the banks/receivers etc.

https://www.nppr.ie/Faq.aspx#fk10

*What if I'm selling my house - how do I prove that I have paid the charge? *


_You will receive a receipt acknowledging payment of the NPPR charge. Furthermore, you can request the Local Authority to provide you with a certificate of discharge. This will be evidence of payment and will confirm that the NPPR charge in respect of the year concerned has been paid. The certificates are important documents and will be required on sale or transfer of the property concerned._

and I see that the NPPR website has added this new bit to the FAQ's

*My company is acting as receiver for a property are we still liable for the NPPR charge and all late penalties accrued? *


_Whether or not an owner of a property liable to the NPPR goes into receivership does not change liability under the Local Government (Charges) Act 2009, as amended, and there is no exemption in the legislation for such cases. If there is an outstanding liability, late payment fees will continue to apply until the liability is discharged._
_If there is an issue regarding who is liable, then regard should be had to the definition of owner in the Act, which is "a person . . . entitled to receive the rent of the property or, where the property is not let, would be so entitled if it were so let". Even in receivership, there is a person, legal or natural, who remains entitled to such income, and that is the person who is liable for the charge under the legislation. The charge must be paid in full._ 

One can only assume that this new clarification was brought about by banks/receivers trying to get out of paying the NPPR, one only has to look at the totals on the Allsops NPPR payments to realise it can be a very significant amount, say where the house is going for less than 100K. Hard to see how it's possible for everybody sharing the Pie to make money, bank, receiver, agent showing property, nppr people, household charge people, banks solicitor, receivers solicitor, bankrupt persons's solicitor, Allsop's.....



I wonder with the new 'ending' of penalties did some lobbying occur by big business - banks and receivers.


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## Time (10 Mar 2014)

Thanks for that Bronte. Looks like the bank will be stuck with the taxes so.


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## Bronte (10 Mar 2014)

Has the bank hinted otherwise?


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## Time (10 Mar 2014)

Yes, they have actually.


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## Bronte (10 Mar 2014)

I thought they might. Could you give me their wording. You may cuggle muggle it a bit so that you don't identify the bank. Would also like to know the banks name, by PM if necessary, was it actually the bank or the banks solicitors?

Just want to know what banks are up to so that proper advice can be given to others.

If you are in this situation be aware that if you voluntarily surrender you will be liable for your own solicitor if using one, and the estate agents fees. If you are broke, I wouldn't agree to a sale unless the bank puts it in writing that all costs associated with selling will come out of purchase monies. 

That would not apply to income tax on say rental income though. That may not be the situation here, but something to be aware of.


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## T McGibney (10 Mar 2014)

Bronte said:


> It's not really a question of who is liable, this charge attaches to the property, rather than the person



This isn't strictly true. The liability to the charge arises from the ownership of a property on a given date so if AN Other owned the property on 31/3/201x, (s)he is liable to pay the NPPR for the year 201x. 

The attachment of unpaid charges to the property is simply a device to eventually bring to heel those property owners who fail to pay when the charge is due.


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## Bronte (10 Mar 2014)

By accident Tommy I today stumbled upon this bit, which is of interest to you and me and Mandelbot and our arguments on whether NPPR is a tax deductable expense.  Useful I would have thought when or if a landlord has put it down as a deduction.  The bit in bold in particular. No different to rates etc.  

*Non-Principal Private Residences and Liability *

_The charge on non-principal private residences (NPPR) was introduced in 2009 under the Local Government (Charges Act 2009, as amended. The charge is payable by the owners of private rented accommodation, holiday homes and other non-principal private residences. It is a matter for persons who own a non-principal private residence on the liability date to declare so and to pay the €200 charge by the due date annually. Income from *the NPPR is used to assist in financing the provision of essential local services provided by local authorities*. Internationally, local services are administered by local authorities and financed by local service charges. In Ireland, local authorities are responsible for, among other services, public parks; libraries; open spaces and leisure amenities; planning and development; fire and emergency services; maintenance and cleaning of streets and street lighting. These facilities benefit everyone._


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## T McGibney (10 Mar 2014)

Thanks B. 

I believe myself that this adds weight to the argument that the NPPR is an "expense of management" of a property, in that it is/was there to finance essential services relevant to the property. 

This is regardless of the jesuitical‎ debate on what constitutes "a rate levied by a local authority".


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## 44brendan (10 Mar 2014)

> This isn't strictly true. The liability to the charge arises from the ownership of a property on a given date so if AN Other owned the property on 31/3/201x, (s)he is liable to pay the NPPR for the year 201x.
> 
> The attachment of unpaid charges to the property is simply a device to eventually bring to heel those property owners who fail to pay when the charge is due.


True enough. However if the bank wish to sell the property it cannot give clear title to a new owner without paying the NPPR charges. Theoretically the owner can subsequently be pursued for the charge plus any negative equity in the property. However, this may prove to be a worthless task in many cases!!


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## Bronte (10 Mar 2014)

T McGibney said:


> Thanks B.
> 
> I believe myself that this adds weight to the argument that the NPPR is an "expense of management" of a property, in that it is/was there to finance essential services relevant to the property.
> 
> This is regardless of the jesuitical‎ debate on what constitutes "a rate levied by a local authority".


 
I danced around the room myself when I read it, don't believe that was there before, or else I missed it.  As you know I last year, claimed the NPPR as a deduction going back 4 years.  

You have better print it out before it 'disappears' and link it on your fact sheet.  

AAM is very helpful sometimes


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