LPT refund when purchasing property

IsThisOneFree

Hi All

I'm about to buy my first place and expect to close within the next few weeks. My solicitor has now informed me that I need to pay pro-rata property tax for 2014. According to Revenue, whoever is the owner of the property on November 1st 2013 is liable for 2014's property tax, so I thought that I wouldn't be liable for any property tax until 2015. My solicitor says that I am refunding the LPT back to the seller for the time that I will occup the property in 2014, the money will not go to revenue.

I find ths quiet unusual, and it doesn't make much sense to me. Had I bought the property in 2013, I would have been exempt (as a FTB), so had this same procedure applied, I would have ended up paying LPT for 2013 but not 2014 or 2015.

There was nothing in the contact about refunding LPT back to the seller. It seems to me that it's just a case of the seller requesting a refund on LPT, but surely I'm just entitled to say no !

Has anybody come across this before at all ?

namenotavailablE

See FAQ number 1.9 on this page: http://www.revenue.ie/en/tax/lpt/vendors-faqs.html

IsThisOneFree

Yup, read all that stuff on revenue.ie which brought me to the conclusion that I'm not liable for any LPT in 2014. So it seems that it's just a case of the seller requesting the money, but I would have thought I'm equally entitled to say no. So was mainly wondering if anybody else has come across this, or indeed, closed a deal this year and not come across this.

Mr. Incognito

It's pretty normal that many costs be apportioned pro ratia when a house is sold up to the date of closing, for example rates, LPT charges, etc.

Whilst you are not liable to Revenue on a strict basis it's pretty much par for the course that they have paid for the full year and are selling it. You take the burden with the benefit when you buy a house.

IsThisOneFree

hmmm, fair enough. I mean, things such as management company costs etc, I can understand, because they are a service which I will avail of from the moment I move in. But LPT is a tax due on a specific date (all be that it is considered to be for a year and falls due once a year). Personally I feel that additional burderns such as LPT should be included in the selling price - if I bought a car with 6 months road tax left on it, I wouldn't be refunding half the road tax cost back to the seller, the fact that it has 6 months road tax would be reflected in the price (if the seller felt it was necessary). So I feel the same should apply in this case. And while we can say that cars cost alot less than (most !) properties, the tax amounts are actually pretty similar !

Anyway, I'm rambling now ! Thanks very much for the reply, it was very helpful - my biggest concern was that my solicitor was acting outside the norm and I really do feel that this should have been brought to my attnetion earlier in the game rather than after contracts were signed.

Citizenpain

the solicitor should have flagged this earlier for you - and a lot of vendors would have put it in the contract.

Bottom line though is that it is common practice to refund the seller

pappe

I have also bought house recently and I have paid the latest LPT.
However it appear that in my case the previous owner didn't pay the previous ones.
Revenue sent me a letter stating they will get all arrears from my wage next month. I called the revenue to clarify the matter. They asked me to find through my solicitors who was the previous owner and if any receipt for the payment. If I don't find this information I am still liable of paying the arrears.
What system is that? I wonder why I need to do this job, spending money and time for this? Isn't their job to chase the previous owner?

IsThisOneFree

My God, that's very strange. I was always led to believe that your solicitor would not (or should not) let the sale go through until they had proof that all LPT & NPPR (if applicable) had been paid up to date. Also, any contact details you have for the previous owner are purely for the purpose of completing contracts and the sale. So I would have thought that passing those details onto any 3rd party (even a Government department) would be frowned upon at best, or possibly even breach of your contract with the seller. If I were you, I'd get onto my solicitor to find out why they didn't pick up on this on time, and let them sort it .... that's what your paying them for after all !

Incidentally, I completed on my place 3 weeks ago and 5 days later got a gas/electricity bill (combined) for almost 800 euro dating back to nearly the middle of last year. It was a bit of a pain, but I had to get my solicitor to write a letter (I didn't pay extra for this) stating I took ownership on a particular date, and the energy provider then corrected their records and sent an updated bill. Presumably they will have to use whatever means necessary (collections agencies etc) to get the money from the previous owner, or whomever was responsible for that unpaid bill. But I would have thought that Revenue would be required to do something similar.

Best of luck with it, I know that buying a place can be stressful and costly enough without getting massive demands for money you don't even owe

Geuze

Friend bough house, completed in Feb 2014.

Moved in, say, 1st March 2014.

Had to pay 10 months LPT.

This is NOT what the law or the Revenue say.


It seems to be custom and practice of the Law Society, i.e. the solicitors.

IsThisOneFree

Geuze wrote: »

It seems to be custom and practice of the Law Society, i.e. the solicitors.

Agreed. Granted it was most likely in the contract however so of course once you sign the contract, you are obliged to pay it. And your friends solicitor should have pointed it out to them (as indeed, my solicitor should have pointed it out to me). But I have to admit, I do still question this practice to be honest

The_Bot

From memory I believe that LPT is a charge on the property. As a result, LPT arrears are attached to the property itself and are payable by whomever owns the property at any given point in time.

This is why it is essential that your solicitor should have satisfied himself/herself that there was no arrears of LPT prior to your purchase, as the unpaid LPT stays with the property until it is settled.

dbran

Check the completion statement issued by your solicitor when the contract closed. You may find that the arrears of LPT were taken into account when computing the final amount of the payment that you made to the seller.

dbran

pappe

Thank you, your comments were very useful for my case!
There is no mention of LPT in the statement given by solicitor. I suppose then she didn't take LPT into account.
In the last 3 days I sent her already 2 emails asking for an explanation and she did not come back to me with any of them.
I will try to call her directly on Monday. However I have only 10 days left before Revenue will take arrears from my wages, hence I need to have it sorted it out urgently.
Is there any way to put a solicitor under pressure ?

Very appreciated

IsThisOneFree

Is there any way to put a solicitor under pressure ?

I've often wondered the same thing !! Have you already paid her ? If not, I guess you can use this as ammunition somehow (while still keeping within the law of course!). Unless your solicitor owns the practice, then she of course has a boss, so you could always ask to speak to one of them (names are usually on the letterhead of the letters you would have gotten from her). What exactly is her solicitor saying when you call them ? If she just fobbing you off, saying she'll call back and then doesn't ? Or what exactly is she doing ?

Besides this, if I were you, I'd get onto Revenue once more and ask for an extension - explain the situation and tell them that you're working relentlessly to rectify the situation but that your solicitor is holding things up. Offer to give them your solicitors contact details if they think it will help ... although I guess it won't as they probably won't contact your solicitor on your behalf. Follow up your calls to Revenue with a letter or e-mail (or both) and ensure your solicitor gets a copy. Likewise, follow up on your phone calls with your solicitor with an e-mail or letter.

From what I've understood, Revenue have always said that as long as you engage with them, they will work with you. They're really only after those are out to "cheat" the system.

Lastly, do you have any letter, either from the solicitor or from the Land Registry, which states that you took ownership of the property, and when ? If so, then surely this should be sufficient to prove to Revenue that you are not liable for any LPT until November this year. Sorry if I'm going over old ground there.

Good Luck !

efb

My Sol was excellent when I bought my house enduring the (then) household charge was paid

efb

So the OP doesn't want to pay any of this year's charge?

Citizenpain

efb wrote: »

So the OP doesn't want to pay any of this year's charge?

Per the legislation he/she shouldn't .. Unless it was written into the sale contract , which it usually is

pappe

Eventually my solicitor came back to me with receipts. All was paid correctly, it was a mistake from Revenue !
Now I feel upset that I spent tons of money (4 calls to LPT helpline, which is an 1890 number) to figure out what this arrears were coming from etc.

Citizenpain

pappe wrote: »

Eventually my solicitor came back to me with receipts. All was paid correctly, it was a mistake from Revenue !
Now I feel upset that I spent tons of money (4 calls to LPT helpline, which is an 1890 number) to figure out what this arrears were coming from etc.

Your solicitor really should have discussed / confirmed this with you during the sale.

for future reference -- never use 1890 numbers - local line alternatives are usually here

http://www.saynoto1890.com/

pappe

Citizenpain wrote: »

Your solicitor really should have discussed / confirmed this with you during the sale.

for future reference -- never use 1890 numbers - local line alternatives are usually here

Thanks for this. It is shame Revenue is using an 1890 number, they should at least give the option of using a local one!

Citizenpain

they do online

Phone: 1890 200 255 (ROI only)*

+ 353 1 7023049 (From outside ROI