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