Dáil Éireann Debate, Thursday - 28 November 2013
51. Deputy Tom Fleming asked the Minister for Finance if he will address the loophole in the legislation whereby persons who no longer own a property in 2013 are liable for the local property tax on this property in 2014; his views on whether this is totally unfair, unjust and unreasonable; and if he will make a statement on the matter. [51215/13]
View answerIn 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. The liability date of 1 November 2013, which applies for 2014, is settled and was approved by the Oireachtas in passing the LPT legislation. I have responded to Parliamentary Questions on the liability date on several previous occasions. In reply to Question No. 110 on 27 March last, I specifically stated that 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 informed the House in my replies to Questions Nos. 221 (49518/13) and 223 (49556/13) on 19 November 2013 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 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. As there are a number of LPT issues to be considered when buying or selling a house, 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.
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 have no plans to amend the legislation governing the liability date for LPT.
