Property tax as a buyer

cookiecakes · 30-01-2014 7:18pm #1

Hi there,

We're hoping to close on our house in the next few weeks. Our solicitor just emailed us to say the vendor is only liable for the property tax up until the point of close so if we were to close tomorrow, we would have to pay 11/12ths of the amount.

However I was under the impression that whoever owned the house on 1st November was liable for the year. According to the Revenue site, we should make sure they have a clearance cert from them stating that it's paid in full before we close.

Has anyone any experience with this or can advise if I am mis-understanding it?

Thanks in advance!

D3PO · 30-01-2014 8:45pm

your correct the seller is libel. There is no pro rata agreement.

Im shocked and disgusted your solicitor would say otherwise.

cookiecakes · 30-01-2014 9:01pm

Thanks D3PO! We were a bit surprised with it alright..I had to come on here just to check a) I wasn't going mad and b) I wasn't imagining it

ted1 · 30-01-2014 9:06pm

It'll be 50 or less, in the grand scheme of things I wouldn't get upset about it.

cookiecakes · 30-01-2014 9:07pm

What do you mean, ted1?

ted1 · 30-01-2014 9:16pm

cookiecakes wrote: »

What do you mean, ted1?

I mean the house is going to cost say 300,000 so 1 months property tax isn't going to add to the cost.

Edit: I misread the original post when I saw November and read it as you needed to pay for December . Move on nothing to see here....

McGrath5 · 30-01-2014 9:35pm

OP I to am facing the same issue at the moment.

The close date for the house I am purchasing is towards the end of March, but the seller is requesting that I pay the portion of property tax for the remainder of 2014.
My solicitor said it may "annoy" the seller if I refuse to pay, but to be honest I am a bit miffed about this.
Does anyone know what the normal practice is in a scenario like this is?

D3PO · 30-01-2014 10:43pm

McGrath5 wrote: »

Does anyone know what the normal practice is in a scenario like this is?

there is no normal practice. Legally they are libel, but its going to be an individual circumstance situation.

if the house is highly sought after that you got eventually after a bidding war might be wise to suck it up if it is a house that's been on the market months or years then telling them to go fu(k themselves is probably the way to go.

out of principle I wouldn't ever pay (a case of do what I say not what I do lol) id rather tell them to wind in their brass necks.

McGrath5 · 30-01-2014 11:49pm

D3PO wrote: »

if the house is highly sought after that you got eventually after a bidding war might be wise to suck it up

Yep that sums it up, compared to what I am paying for the house it is a tiny amount, but it is the principle that is annoying me.

wench · 31-01-2014 12:06am

D3PO wrote: »

your correct the seller is libel. There is no pro rata agreement.

Im shocked and disgusted your solicitor would say otherwise.

The Law Society, in their infinite wisdom, issued guidance to solicitors that the LPT should be apportioned between buyer & seller.

While the seller should be liable, the standard contract now says that the tax will be split. If you've signed a contract without having this clause removed, then unfortunately, they have you over a barrel.

http://www.lawsociety.ie/Pages/Practice-Notes/Local-Property-Tax/

Bigcheeze · 31-01-2014 12:34am

Splitting it seems fair and practical because otherwise you'll have buyers trying to defer closings until after the filing date and sellers trying to close before.

dissed doc · 31-01-2014 12:35am

While the owner at a certain point in time in november would be liable for sure to pay the whole year, it seems pretty reasonable that you pay your share from the point in time that the property becomes yours. Like council tax in the UK. (Yes before anyone says this isn't the UK, I am aware of that. ).

Why is it unreasonable to pay the portion of property tax due for the year from when you own the property?

Liable to pay is just liable to pay, like the way landlords are liable to pay property tax but can just load it onto the overal rent being asked.

wench · 31-01-2014 12:49am

dissed doc wrote: »

Why is it unreasonable to pay the portion of property tax due for the year from when you own the property?

Well when the law has specific exemptions written in, it is somewhat annoying for the Law Society to try and override that and make you liable.

Arbiter of Good Taste · 31-01-2014 12:52am

Liability to discharge means the obligation is on the "liable" party to file the payment. It does not necessary mean that the liable party should ultimately bear the cost. The accepted practice is to split the cost pro rata which is the fairest solution

Arbiter of Good Taste · 31-01-2014 12:55am

wench wrote: »

Well when the law has specific exemptions written in, it is somewhat annoying for the Law Society to try and override that and make you liable.

To what exemptions do you refer?

wench · 31-01-2014 12:56am

Arbiter of Good Taste wrote: »

To what exemptions do you refer?

Mainly the exemption last year for first time buyers.

Arbiter of Good Taste · 31-01-2014 1:03am

Still not necessarily wrong. Would the buyer in that case not seek a refund from Revenue for the pro rata portion?

wench · 31-01-2014 1:13am

Why would Revenue refund it? The full amount was correctly owed by the person who owned it at the liability date.
There is no mention in any of their documentation about this being a possibility.
The only refunds they mention are for people who made returns, but who were not liable due to the drafting error.

McGrath5 · 01-02-2014 1:59pm

Well I heard back from my solicitor yesterday, and the vendor has agreed that they will take responsibility for the 2014 LPT.

My solicitor says that more often than not, buyers and sellers are agreeing to share the cost of this tax for the year and that I am quite fortunate the vendor has agreed to this.

jon1981 · 01-02-2014 7:46pm

OP, your solicitor (as mine was) should be clear about this, the rule is the owner of the house as of November in the current year pays the property tax for the following year. E,g, if you own the house in November 2013, you pay the tax in 2014.

That's the rule, if your solicitor is proposing some pro-rata bull ****, get rid of him/her

jon1981 · 01-02-2014 7:49pm

McGrath5 wrote: »

Well I heard back from my solicitor yesterday, and the vendor has agreed that they will take responsibility for the 2014 LPT.

My solicitor says that more often than not, buyers and sellers are agreeing to share the cost of this tax for the year and that I am quite fortunate the vendor has agreed to this.

It's not fortune, the vendor has no legal standing to make you pay the LPT.

Property tax as a buyer

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