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, 1 November in the preceding year.
As I informed the House in my replies to a number of Questions on this matter, most recently in my reply to Questions Nos. [49518/13] and [49556/13] on 19 November 2013, 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. I also noted that detailed guidance on LPT issues arising in the context of the sale or transfer of a residential property was prepared by the Revenue Commissioners in consultation with the Law Society and 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 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.
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.
I am advised by the Commissioners that no refund of 2014 LPT arises in the case of a vendor who owned the residential property on 1 November 2013, as s/he is the liable person on the relevant liability date. A purchaser who buys a residential property after 1 November 2013 is not liable for LPT for 2014 and as such, the question of a refund of LPT does not arise. However a person who purchases a residential property after 1 November 2013 but on or before 31 December 2013 may qualify for an exemption from LPT for 2015 and 2016 provided they occupy the property as their sole or main residence and continue to do so until the end of 2016.
