I propose to take Questions Nos. 34 and 38 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, 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. Revenue recently wrote to property owners who paid their 2013 LPT by lump sum or by way of regular cash payments to ask these owners to confirm their method for paying their LPT liability for 2014.
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.
These dates have been in the public domain since December 2012 when the legislation was passed. Questions on the 1 November liability date have been raised and responded to on several occasions, including my reply to Question No. 110 on 27 March this year. In my replies to Questions Nos. 221 (49518/13) and 223 (49556/13) on 19 November 2013 I advised the House that having a liability date before the year commences is preferable 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.
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.
I am advised that the Revenue website includes a dedicated page outlining what property owners are required to do for 2014 and this clearly states that whoever is the liable person for the property on 1 November 2013 will be responsible for paying the tax for 2014. In addition, Revenue spokespeople have also provided clarification on this point when taking part in national and local media interviews recently.
As there are a number of LPT issues to be considered when buying or selling a house, I am advised 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 since last August on the Revenue website at http://www.revenue.ie/en/tax/lpt/sale-transfer-property.html and on the Law Society’s website. Finally, I re-iterate that the liability date for 2014 of 1 November 2013 is settled and has been approved by the Oireachtas in passing the LPT legislation and I have no plans to change the law in question.