Local Property Tax (LTP) 2017 – What you need to know when selling a house.
What is local property tax?
Local Property Tax (LPT) is an annual tax payable on the market value of residential properties which came into being in 2013.
You are liable to pay the tax if you are the registered owner of a property. If you own multiple properties, you are obliged to pay LPT on each individual property.
How much LTP do I have to pay?
LPT is a self-assessed tax. The amount on LPT you will have to pay depends on what the property’s declared worth was as of 1 May 2013. If the property worth was declared honestly then you will continue to pay that amount until 31 October 2019. The tax increases incrementally with every valuation band and can differ between areas due to reductions made by different local authorities.
Paying LTP when selling a property
If you are selling a property and the sale price does not fall within the valuation band, you may need to obtain written clearance from Revenue. Your solicitor will be able to advise you if this is necessary but general clearance (accepted without approval from Revenue) will apply if:
- The sale price does not exceed €300,000.00
- The sale price falls within the allowable valuation margin, i.e. when the sale price is not more that 25% higher than the upper limit of the valuation band declared. In Dublin, the allowable valuation margin in 50% high than the upper limit of the valuation band declared.
There are other conditions which may mean that general clearance applies where there is a difference between the sale price and the valuation band, which includes the expenditure of enhancements to property for sale, or where the vendor can base the valuation on the sale of comparable properties.
Selling a Property in 2017 and your LTP
If you are selling a property in 2017, you are liable to pay the full amount of LPT for 2017, rather than up to the date of sale. This is because you are considered to be liable for 2017 if you owned the property on 1st November 2016, being the “valuation date”.
Even though you pay the full amount, the tax will be apportioned between the purchaser and the seller. Effectively, the purchaser will, on closing, reimburse you for the LPT paid from the date of closing the sale to the 31st December 2017 (or the year of sale as the case may be).
You can access LPT property history details by logging on to the LPT online system using the PPSN to which the property is registered and the Property ID number and PIN.
If you do not have these details, you can apply online to have the details re-issued to you, or alternatively, you can contact the LPT Helpline on 1890 200 255 or by email at firstname.lastname@example.org or by post to LPT Branch, PO Box 1, Limerick.