The Finance (Local Property Tax) Act 2012 (‘the Act’) provides that the owner on 1st November 2013 is the person liable to pay LPT for 2014 – even if that person is selling the property before the end of this year and will not own or occupy the property at any time during 2014.
This is bad news because if the purchaser is exempt then they will not agree to apportionment. Many more 2013 purchasers are entitled to LPT exemtions because of the widening of what was previously thought to be an ‘exemption’ only for first time buyers to all purchasers of such property during 2013. In relation to the ‘exemption’ for purchasers (not just first time buyers) of second-hand residential property during 2013 for owner occupation (investors are not entitled to the exemption) – Revenue has confirmed that if these sales do not complete before the end of 2013, purchasers will not be able to claim exemption for 2014, 2015 and 2016.
Revenue has confirmed that they will go by the date of completion of the transaction, not the date of the contract, and that they will not entertain claims for an exemption where the closing takes place after 31st December 2013. This is an important point for purchasers to bear in mind when negotiating contracts and the question of apportionment.Owner occupiers who are not first time buyers and who buy between 2nd May 2013 and 31st December 2013 will only get the exemption for 2014, 2015 and 2016 if they apply to Revenue for the exemption.
Revenue has confirmed that the only tax that will be refunded is to a purchaser of second hand residential property for owner occupation who bought between 1 January and 1 May 2013 and the amount to be refunded is the amount of the 2013 tax they paid. By virtue of being the owner as of 1 May 2013, this person was the liable person for the 2013 tax. The 2013 tax was paid with this purchaser not knowing that the true interpretation of the Act was that all purchasers of this type were in fact entitled to an exemption in the same way as first time buyers. The 2013 tax paid will be refunded – but only if the purchaser applies to Revenue for a refund and shows that s/he meets the requirements of Section 8 of the Act.