Are you in the process of selling your property and wondering what you have to do to ensure that you are Local Property Tax (LPT) compliant?
As in previous years all residential property owners are required to discharge all Local Property Tax up to the date of closing of the sale of the property. This now includes the 2016 LPT payment as the liability date of 1st November 2015 has now passed. Note that the Single Debit Authority for this year is due on 21st March 2016.
The Revenue Commissioners have revised their guidelines for clearance for LPT which aims to simplify the procedure for those selling their property after 1st November 2015.
Firstly, general clearance now applies to vendors who are selling their property for €300,000 or less – the chargeable value does not need to be considered. This procedural amendment will effectively speed up the sale process from a Local Property Tax point of view as it will not be necessary for your solicitor to correspond with Revenue where the sale price is under this value.
Secondly, the ‘allowable margins’ where the sale price exceeds the valuation have increased. This takes into account the rise in the property market over the past number of years. The new allowable margins have increased as follows:
- from 15% to 25% outside Dublin
- from 25% to 50% within Dublin.
Thirdly, these allowable margins referred to above are carried through to the general clearance condition which relates to the expenditure on enhancements to a property. For example, if your Sligo property is valued in band 1 (€0 – €100,000) and it is sold for €180,000, general clearance of 25% more than the €100,000 will apply i.e. €125,000. However after the valuation date you incurred refurbishments of €110,000. General clearance applies because the gap between the upper limit of €125,000 and the sales price do not exceed the refurbishment expenditure.
Fourthly, where you base your valuation on comparable properties in the area you can now provide evidence of values of a similar property for a period of 9 months from 1st May 2013 as opposed to the previous 6 months that was required by Revenue.
If you are selling your property and have any questions on your Local Property Tax liability contact McCanny & Co. Solicitors, Pollexfen House, Wine Street, Sligo on +353 71 91 45928 or email firstname.lastname@example.org