Sale / transfer of ownership of residential property

For Local Property Tax (LPT) purposes, the liability date for 2017 is 1 November 2016. Whoever owns the residential property on that date will have to pay the tax for 2017. If you (as an owner) sell or transfer ownership of your residential property after 1 November 2016 you will be liable to pay LPT on the property for 2017, even if it is sold or transferred before the end of 2016. The 2017 LPT charge should be paid in full at the time of the sale (or transfer of the property to the new owner)

The following guide describes the implications of the sale of a property for both the vendor and the purchaser. Although the guide focuses on the sale of a property, some parts also apply to changes of ownership that take place by, for example, gifts and inheritances.

Buying or selling a residential property – important information

  1. Selling your property? What you should do before completion of the sale.
  2. How to obtain General Clearance online to prove there are no outstanding LPT issues.
  3. Buying a property? What you should do before & after completion of the sale.
  4. Arrangements that apply to residential properties purchased from local authorities.

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1. Selling your property? What you should do before completion of the sale

  • Submit any outstanding LPT Returns.
  • Pay any outstanding tax, interest and penalties, including Household Charge arrears.
  • If you were entitled to an Exemption or Waiver from the Household Charge but did not claim it, you should request the relevant certificate from the Household Charge Support Centre by email: support@householdcharge.ie or by post: PO BOX 12168, Dublin 1.
  • Consider whether the valuation band or valuation you declared at 1 May 2013 was reasonable and honest.
  • Make sure that you were entitled to any exemption you claimed.
  • If required, you should self-correct any return where you under-declared the value or claimed an exemption that you were not entitled to (Guidance is available at: pdfLPT Return - Self-Correction Guidelines for Residential Property Owners (PDF, 2.8MB).
  • Provide the purchaser or their solicitor with the following details:
    • Property ID,
    • Property valuation band or the actual valuation declared on the 2013 LPT Return,
    • If you self-corrected your original declared valuation then you should provide the revised valuation,
    • Basis for arriving at the valuation,
    • Details of any exemptions claimed.

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Potential issues where the sales price exceeds the declared valuation on the 2013 LPT Return:

In general, if you declared a valuation band or valuation on your 2013 Return honestly and in line with Revenue guidelines, this valuation will continue to apply until 31 October 2019. In most cases you can use the LPT online system to obtain clearance from Revenue to prove that there are no outstanding LPT issues with your property. This is known as General Clearance. However, if the expected or agreed sales price is greater than the valuation band or valuation declared on the 2013 Return, you should confirm whether you also need to obtain Written Clearance from Revenue, in addition to General Clearance:

  • Written Clearance will not be required if the sales price meets any of the conditions set out in Section 4.2.1 (Allowable valuation margin), Section 4.2.2 (Expenditure on enhancements to a property) or Section 4.2.3 (Sales of comparable properties) of the pdfGuidelines for the Sale or Transfer of ownership of a Relevant Residential Property (PDF, 654KB). If you meet any of these conditions, then you can obtain clearance using the LPT online system (General Clearance).
  • You will need to obtain Written Clearance from Revenue where none of the above conditions are met and your declared valuation was made in good faith and in line with Revenue guidelines. You should apply for Written Clearance by completing pdfForm LPT5 (PDF, 434KB) and including relevant supporting documentation. Revenue will review the basis for your declared valuation and determine whether clearance should issue. Where it is satisfied that your declared valuation was reasonable, Revenue will provide Written Clearance to you. Further information on how to apply for Written Clearance is provided in Section 4.3 of the pdfGuidelines (PDF, 654KB).

Where to find further information on your LPT obligations:

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2. How to obtain General Clearance online to prove there are no outstanding LPT issues

Prior to the sale of the property, you can obtain General Clearance by accessing the LPT online system using your PPSN, Property ID and PIN. You should select the Property History Screen to view the relevant LPT details which can be printed off and used to satisfy the purchaser that the property has no outstanding LPT issues. For further details see: pdfOwner's (Liable Person) Guide to Property History Screens (PDF, 599KB).

If you do not have your Property ID or PIN you can apply online to have these details re-issued to you.

You can provide your solicitor or the purchaser’s solicitor with access to this facility by giving your PPSN, Property ID and the Property Access Number (PAN) to him or her. You can retrieve the PAN when you access the Property History Screen on the LPT online system. Your solicitor or the purchaser’s solicitor can use these details to access the Property History Screen via their ROS account and confirm whether there are any outstanding LPT issues. For further details see: pdfSolicitor's/Agent's Guide to Property History Screens (PDF, 685KB).

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3. Buying a property? What you should do before & after completion of the sale

Before completion of the sale, you or your solicitor should:

  • Obtain any relevant information from the vendor (Property ID, valuation band or valuation, basis for valuation and details of any exemption claimed).
  • Check whether there is any outstanding tax, interest or penalties in relation to the property (see Section 2 above).
  • Check whether there are Household Charge arrears in relation to the property.
  • Consider whether the valuation declared by the vendor (seller) on 1 May 2013 appears to have been reasonably and honestly made. If you have any concerns about the original valuation these should be addressed, if possible, prior to completion of the sale. For further information please see the FAQs for Purchasers.
  • Where the anticipated or agreed sales price is greater than the  valuation band or valuation declared on the LPT Return, you should ask the vendor (seller) whether specific Written Clearance was required from Revenue. Where this was required, confirm whether it has been obtained from Revenue.

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After completion of the sale:

  • If you consider that the valuation declared by the vendor/previous owner in relation to 1 May 2013 could not reasonably have been arrived at and should be higher, you should submit your own estimate of the market value in writing to the Revenue Commissioners, LPT Branch, P.O. Box 1, Limerick as soon as possible after the sale. The following details should be provided:
    • Name and PPSN of purchaser (new liable person),
    • Property ID,
    • Property address,
    • Your  estimate of the market value of the property that would have applied at 1 May 2013 (property valuation band or valuation if value greater than €1m).
  • You should confirm whether you are liable to pay the LPT on the property for 2017. If you owned the residential property on 1 November 2016 you are the liable person for 2017 and are required to pay the tax for 2017, unless the property is exempt from LPT.

Exemptions:

  • In most cases a residential property that was exempt on 1 May 2013 continues to be exempt until the next valuation date (1 November 2019) even where the property is sold or ownership is transferred by way of gift or an inheritance. In these cases the exemption automatically carries over to the new owner of the property. However, the following exemption will not carry over to the new owner of the property:
    • Second hand properties purchased between 1 January 2013 and 31 December 2013 are exempt until the end of 2019 if used as the person's sole or main residence. If the person subsequently sells the property after 2013 the exemption will no longer apply.
  • If no exemption was claimed by the previous owner, you should confirm whether you are entitled to claim an exemption from LPT.
    • If you purchased a second hand property in 2013 and occupy it as your sole or main residence, you are entitled to an exemption which you can claim online. Step-by-step instructions are available at: Claiming an exemption for a second-hand property purchased in 2013 by a non-first time buyer.
    • If you qualify for  any other exemption from LPT you will need to claim the exemption by writing to the Revenue Commissioners, LPT Branch, P.O. Box 1, Limerick and provide your name, Property ID, Property address and your PPSN or tax reference number.

Where to find further information on your LPT obligations:

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4. Arrangements that apply to residential properties purchased from local authorities

Local authorities were permitted to value all of their residential properties in the valuation band zero to €100,000 in respect of the liability date 1 May 2013. Where a property is purchased from a local authority, the purchaser may assume that the local authority declared a reasonable market value for the property and has paid any LPT that was due. A purchaser may accept this valuation regardless of the actual selling price and may continue to pay LPT based on this valuation until they have to re-value the property on the next valuation date (1 November 2019).

October 2016

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