LPT AND THE SALE OF YOUR HOME
In Ireland LPT (Local Property Tax) is collected by Revenue. Furthermore, arrears of Household Charges( from 2012) are also collected by Revenue through its LPT system. So, what must a seller or purchaser do to ensure everything is in order when selling or buying?
WHAT A SELLER SHOULD DO
Submit all outstanding LPT returns.
Pay all outstanding tax, interest and penalties (including that representing arrears of household charge).
Look for a certificate of exemption or waiver from the Local Government Management Agency (LGMA), where the vendor has not claimed a waiver or an exemption from the household charge to which he or she was entitled.
Self-correct any return where there has been an under-declaration of value.
Provide the purchaser with such information about the tax arising on the previous valuation date (including the chargeable value adopted and the basis for it, details of any exemption claimed, details of any Revenue estimate or assessment) as is relevant to the purchaser.
Ascertain if the agreed sales price comes within any of the conditions below and, if not, whether a specific Revenue clearance is required in relation to any potential under-declared liability.
WHAT A PURCHASER SHOULD DO
Establish if there is any outstanding tax, interest or penalties in relation to the property.
Establish if the property is household charge compliant.
Where the property is sold within a valuation period, consider whether the valuation declared by the vendor in relation to the preceding valuation date appears to have been reasonably and honestly made, having obtained all relevant information and supporting documentation from the vendor.
Ascertain from the vendor if the agreed sales price comes within any of the conditions below and, if not, whether a formal Revenue clearance has been obtained in relation to any potential under-declared liability.
GENERAL CLEARANCE CONDITION 1 –
SALES PRICE NOT EXCEEDING €350,000.
Where a property is sold for a price that does not exceed €350,000, general clearance applies. The chargeable value that was declared for the property is not taken into account.
GENERAL CLEARANCE CONDITION 2 –
ALLOWABLE VALUATION MARGIN
The condition here relates to the allowable margin by which the sales price of a property exceed the valuation band/chargeable value that was declared for the property in relation to the 1 May 2013 valuation date. Different allowable margins apply in relation to properties situated in Dublin city and county and those in the rest of the country.
Condition 2 stipulates that sales price must not exceed the upper limit of the valuation band/chargeable value or that, when it does, that any such excess must be within the allowable margin. The allowable margins are:
Where the sales price is not more than 50% higher than the upper limit of the band declared, and in the case of properties for which the declared chargeable value exceeds €1,000,000, where the sales price is not more than 50% higher than the chargeable value. In the case of properties situated in Dublin city and county, the 50% allowable margin is increased to an 80% allowable margin.
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