Jul 29

Local Property Tax when selling a property

When a property is being sold the Local Property Tax for the calendar year in which it is being sold is apportioned / divided between the vendor and the purchaser at the date of the sale. But how can the purchaser be sure that the property is correctly valued for Local Property Tax purposes and that they won’t face issues in the future if it is not?

For Dublin properties, the Local Property Tax valuation is presumed to be correct i.e. it is given General Clearance from the Revenue Commissioners if the sale price is within 25% of the top of the band in which the property is valued.

Where the sale price for a house is more than 25% greater than the top of the band in which Local Property Tax has been paid, the Vendor must either re-value the property to bring the sale price within 25% from the top of the bank in which the property is valued, or the Vendor can seek Specific Clearance from the Revenue Commissioners by submitting an LPT5 application form complete with supporting documentation. This process takes time so the Vendor must act promptly in making this application.

Either a Specific Clearance Certificate, or payment of LPT at the appropriate band for General Clearance to apply, is required prior to the closing of a residential property sale.

If you have any queries about Local Property Tax or any property matter, or if you would like a detailed quotation please Contact Us.