Written answers

Tuesday, 8 July 2014

Department of Finance

Property Taxation Exemptions

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail)
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180. To ask the Minister for Finance the circumstances of a house sale where a vendor has claimed an exemption of unfinished housing estate and it is subsequently discovered after the sale that the property was not covered by the areas listed in SI No. 91 of 2013, Finance (Local Property Tax) Regulations 2013; the person liable for the outstanding LPT liability and penalties on the property. [29457/14]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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I am advised by Revenue that in the absence of full details in regard to the property in question and the sale/purchase arrangements, a specific response can not be provided. However, by way of general comment, Section 10 of the Finance (Local Property Tax) Act 2012 (as amended) made provision for a number of exemptions from Local Property Tax (LPT). The exemptions include certain unfinished housing estates, which are prescribed (as unfinished) by the Minister for the Environment, Community and Local Government in Statutory Instrument (SI) No. 91 of 2013. The 'prescribed list' was published in March 2013 and can be viewed at . It is important to be aware that, in line with Government policy, only properties appearing on the 'prescribed list' are entitled to exemption from LPT and Revenue has no discretion in this regard.

Also, it does not follow that properties, which are exempt from the Household Charge (HHC) are automatically included in the 'prescribed list' for LPT as the qualifying criteria in respect of both exemptions are not the same. For example, certain properties and estates that were listed as exempt from HHC on the basis of being 'unfinished' and which were subsequently further developed in the period up to March 2013 were excluded from the LPT 'prescribed list' by the Minister for the Environment, Community and Local Government. This had the effect of very significantly reducing the number of exemptions in respect of LPT in comparison to HHC.

In regard to the issue raised by the Deputy, the vendor of a residential property is obliged, in advance of any sale, to submit all LPT Returns and pay all liabilities due for the period/s that he/she was the liable person. The vendor must also correct any Return where there was an under-declaration of value, or where an exemption was incorrectly claimed and must provide the purchaser with full details of the declared valuation or exemption claimed. To assist vendors in ensuring LPT has been correctly applied, Revenue has developed an intuitive online system that allows self-correction and payment of any under-valuation errors in advance of a sale. This facility can be accessed through the LPT page on the Revenue website at using the relevant Property ID and PIN codes.

The purchaser on the other hand must ensure that he/she receives this information in advance of closing any sale and from it, be in a position to satisfy himself/herself that there are no outstanding LPT liabilities, including any interest or penalties. With regard to HHC (as distinct from LPT), where an exemption was in place on foot of an unfinished estate, then the vendor should have in his/her possession a 'Certificate of Discharge', which would have been provided by the relevant Local Authority and must be in a position to pass this 'confirmation of exemption' to the purchaser before the completion of sale. Where any purchaser who acquires a property and subsequently discovers that the vendor supplied Revenue with false information in regard to the valuation or the exemption, then he/she should immediately advise LPT Branch of the details. In such circumstances, assuming that the purchaser did not agree to pay any outstanding balance as part of the sale agreement, the vendor may be liable to a penalty equal to the amount of the outstanding LPT, in addition to paying the balancing amount, up to a maximum of €3,000. The purchaser could also become liable for the same penalty in circumstances where he/she is aware that the vendor supplied false information but fails to notify Revenue.

Revenue has stressed to me the important role that solicitors, whether representing vendors or purchasers in the conveyancing process, must play in respect of LPT. It is incumbent on them to ensure that LPT has been correctly declared and paid on any property before it is sold/purchased thereby protecting their clients from the imposition of any additional costs including interest or penalties for non-compliance with LPT obligations. Finally, Revenue has advised me that it has published detailed guidelines on its website in regard to the obligations of vendors and purchasers in respect of Local Property Tax (LPT), which may be of assistance to the Deputy or the person in question. Alternatively, if the Deputy or the person in question wishes to provide specific details of the property in question then Revenue will be in a position to provide a more precise response. 

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