I propose to take Questions Nos. 221 and 223 together.
In accordance with the Finance (Local Property Tax) Act 2012 (as amended), liability for Local Property Tax (LPT) will arise where a person owns a residential property on the liability date, which was 1 May 2013 for 2013 and for subsequent years is 1 November in the preceding year. Section 119 of the Act sets out the dates for payment of the Local Property Tax and clarifies that while the LPT is due by reference to a liability date it is not payable until a later date. For the year 2014, the liability date is 1 November 2013 and the tax is payable on or before 1 January 2014.
Where a liable person sells their residential property between 2 November 2013 and 31 December 2013, provided that they owned the property on 1 November 2013, they will be liable to pay LPT on that property for 2014. Detailed guidance on LPT issues arising in the context of the sale or transfer of a residential property, including this issue, was prepared by the Revenue Commissioners in consultation with the Law Society and published earlier this year. The guidance is available on the Revenue website at http://www.revenue.ie/en/tax/lpt/sale-transfer-property.html .
For a tax such as LPT to function properly, legislation must specify a liability date for the tax to have application for a particular year. Whatever date is prescribed, the question of liability when there is a change of ownership has to be managed, and I would expect that the LPT liability involved is likely to be factored in during negotiations between the parties on the sale price and the closing date of a particular contract.
The liability date for 2014 of 1 November 2013 is settled and has been approved by the Oireachtas in passing the LPT legislation. Having a liability date before the year commences is preferable from an administrative point of view as there is certainty about who the liable person is for the coming year, that person has a reasonable amount of time to make the necessary provisions and they have access to the widest possible range of options for paying the tax. In particular, the liable person can put the required arrangements in place to ensure that phased payments by way of direct debit or deduction at source from employment, occupational pension or from certain Government payments would commence from January 2014 and would spread payment of the full LPT liability evenly over the course of 2014. I do not intend to change the liability date as specified in the legislation. Therefore, I have no plans to change the legislation in question.
An individual selling a property will often be purchasing another property at around the same time. While a vendor who owns a property on 1 November 2013 is liable for the 2014 LPT on that property, if s/he does not purchase another property before 1 November 2013 s/he will not be liable for the 2014 LPT on that “replacement” property – whoever is the owner as of 1 November 2013 will be liable.
