Key Post Anyone who buys a home in 2013 is exempt from LPT until 2017, not just First Time Bs

[spillano]

Hello all. New login, as couldn't remember my very very old one...
Anyways, bought house after 2 Nov. FTB (not that that matters eh).

Told on day of closing by solicitor that we had to pay the vendor the LPT, as it was for 2014, even though we exempt. If not, sale would be delayed and we liable for a 10% interest rate charge per annum ....

The reason we were told we had to pay was because as another poster pointed out "purchaser could end up with a charge on the title", which solicitors could not allow. Vendors paid Revenue LPT for 2014 day of closing; then we repaid vendors; and solicitor says we should attempt to get refund from Revenue due to our exemption.

Any advice? Many thanks.

 

[jod]

Spillano

I cannot see how Revenue would entertain your request for a refund, that was a contract between you and the vendor. The vendor paid Revenue as they were liable 1 Nov so Revenue happy.

Purely a matter of negotiation between you and the vendor. We are in the same boat, except we are not FTBs so looking to 2015 and 2016 as a net net windfall gain.

 

[Sophrosyne]

Spillano,

You did not pay LPT.

What you paid was compensation to the vendor for his/her LPT paid for 2014.

Therefore, there would be no question of a refund.

 

[spillano]

Hi. thank you for the replies.
Yes that is what we were thinking also.

An awful situation that I think we were advised incorrectly about, and given no choice about!

It would seem to me that our solicitor should NOT have negotiated this ... and left us liable!

 

[spillano]

We are in the same boat, except we are not FTBs so looking to 2015 and 2016 as a net net windfall gain.

Hi. Did ye have to pay the vendors back for 2014 also? I wonder what all the solicitors are advising those who do not have to pay for purchasing in 2013 the 2014 LPT... which is basically now the case.

 

[Bronte]

It would seem to me that our solicitor should NOT have negotiated this ... and left us liable!

This is not the solictitors fault. He did what was advised by the Law Society, who were not informed by revenue that there was an error in the legislation. And it was up to you to ultimately accept or reject the deal, because of LPT, ie you could have walked away. How much are we talking about here?

I guess the best solution going forward, is for purchasers to pay the LPT up front to revenue and seek a refund, but not sure how that would work as the person liable is the person residing in the property on 1st Nov.

 

[spillano]

This is not the solictitors fault. He did what was advised by the Law Society, who were not informed by revenue that there was an error in the legislation. And it was up to you to ultimately accept or reject the deal, because of LPT, ie you could have walked away. How much are we talking about here?

Not sure what you mean by walk away. We would have lost the house possibly and if not ended up paying for the 10% interest rate per annum for days over the closing date.

We were only informed about the fact that we had to pay, on the day of closing!

We were not given any choice in paying or not. Solicitor said the deal would not close if we did not pay ...

 

[Sophrosyne]

Spillano,
Just to clarify …

The Law Society is perfectly capable of reading and understanding legislation, no matter how new.

As a first-time buyer, the drafting error clearly does not apply to you.

LPT is a charge on the property and it was up to your solicitor to ensure that the liable person – the vendor - had paid the LPT for 2014.

LPT legislation does not require a purchaser to compensate a vendor for LPT paid. This is just negotiation between vendor’s and purchaser’s solicitors.

I agree that being advised on “the day of closing” that you were expected to compensate the vendor is too late for walking away.

That said, however, this is all academic. Instead of singling it out, the purchaser could just as easily have factored the LPT paid into the original sale price and you wouldn’t have been the wiser.

 

[jod]

Spillano

yes, we are in the same boat though not closed yet. Purely a matter of us wanting the sale contract signed and also we were conscious of any further delay that would mean not closing until the new year and then we would lose all exemptions.

In a year or two or even a few months we will have long forgotten about this (and hopefully the purchase price!)

The % of the LPT over the price is tiny so not worth losing sleep over though still worth trying to get away with paying it.

 

[jod]

Spillano

just thinking, have you paid your solicitor yet? They should have made you well aware of this long before closing!

 

[listen]

Hi There

We purchased house in September. I got onto Revenue by phone and they said said they would get back. They attached our new home(Our residence now) to our old home. Didn't receive any call back. So i rang again and they said we were not liable. My solicitor just mailed me to say to inform revenue that we are exempt before the end of the year. Is there a form? Or should i get it in writing from revenue?

 

[Brendan Burgess]

You must make a return like every other home owner and you must claim the exemption.

Brendan

 

[Berni]

My solicitor just mailed me to say to inform revenue that we are exempt before the end of the year. Is there a form?

You need to fill out form lpt4, and claim the exemption on it (I think you choose B)

[broken link removed]

 

[listen]

Thanks for your advice. Revenue have assigned the new place to my OH rental property they have told me. But i will fill the form out and send it away. Thanks for everything.

 

[marymary]

Received letter from revenue saying I was exempt

Hi Folks,
I just got a letter saying revenue records show I had bought a house and may be exempt.
Was a bit surprised as my home has been my principal primary residence for a good few years now and my only property.

Seperated a few years ago and we divided two properties between us. No stamp duty was payable as it was a transfer on seperation.

Turns out title change was only registered to me in my name only by solicitor in 2013. Previously property has been in both our names. Can't find anything to cover this situation and from looking at previous posts it appears legislation was poorly drafted.

Anybody know whether this is a loop hole I can legitimally avail of as in tax avoidance rather than tax evasion.

 

[Dermot]

I realise this is an old Thread but a friend of mine who owns a few rental properties wishes to claim an exemption from lpt for 2 new unused properties which he purchased from a receiver earlier this year. He told me that revenue are looking for proof that they were unused in order to claim the exemption. One of them had electricity supplied (which was used for lighting the general area for security reasons) and the other had no electricity connection.
What would be acceptable proof to revenue as it would appear that the person in revenue kept reverting to the builder/developer scenario and to contact them when the fact is that they are nowhere to be had.

 

[Sophrosyne]

Possibly.

Could the receiver provide any information, such as the stage of completion when the properties went into receivership?

 

[Dermot]

Apparently as far as the receiver's are concerned when he rang them their files were closed and really were not interested in his problem.

 

[briandublin]

Article in the Irish Times suggests an extension of this exemption to 2020 even for those who bought back in 2013. Can't post the link as I'm newly registered but it was by Cliff Taylor on Tues 8th December. Did anyone else see it?

 

[Sophrosyne]

This is a link to the article.

“New homes purchased up to the end of October 2019 will remain exempt from local property tax (LPT) under a Bill the Government plans to pass into law this week.

The proposed legislation would extend the exemption on homes bought from builders and developers, already in place since 2013, for an additional three years beyond its existing end date of October 2016.
The exemptions will mean that anyone who bought a newly built property from January 2013 on will remain exempt from the tax until at least 2020. Anyone buying a newly built property from now will also remain exempt until at least 2020.”

The article also states that:

“However, a report to Minister for Finance Michael Noonan last summer warned that the existing exemptions should be abolished and a new valuation method developed to stop the tax losing legitimacy, or facing a possible legal challenge.

The report, completed by former senior public servant Don Thornhill, found that, last June, some 42,000 properties were exempt from LPT. Of these, almost 12,000 benefited from the exemption on new homes sold by developers or held by them as stock.”