SEC­OND HOME TAX

Sunday Independent (Ireland) - Business & Appointments - - FRONT PAGE -

The sec­ond home tax, also known as the NonPrin­ci­pal Pri­vate Res­i­dence charge (NPPR), could catch many sell­ers out — par­tic­u­larly the so-called ‘ac­ci­den­tal land­lords’ of re­cent years. This €200 an­nual charge was first in­tro­duced in 2009 and then abol­ished in 2014 when it was re­placed by the prop­erty tax.

Should you be sell­ing a prop­erty which was orig­i­nally your home — but which you moved out of in re­cent years, you must prove that the NPPR has been paid for that prop­erty.

If you owned a res­i­den­tial prop­erty be­tween 2009 and 2013 which was not your only or main res­i­dence (even for just one of the years that fell dur­ing that five-year pe­riod), you should in most cases have paid the NPPR for that prop­erty. For ex­am­ple, if you moved out of — and then rented out — a home which you bought dur­ing the boom, you should have paid the NPPR for any of the years be­tween 2009 and 2013 that you rented out the prop­erty. Sim­i­larly, should you have in­her­ited a res­i­den­tial prop­erty which you have only ever used as a hol­i­day home, you should have paid the NPPR on that prop­erty for any of the years be­tween 2009 and 2013 that you owned the prop­erty.

You must pay the orig­i­nal NPPR due, as well as late fees and penal­ties, if you have never paid the NPPR for a prop­erty you owned which was li­able for the charge. The to­tal NPPR bill due now — for a prop­erty owned for each of the five years be­tween 2009 and 2013 and for which the sec­ond home tax was never paid — is €7,230.

The NPPR was paid to lo­cal au­thor­i­ties but many peo­ple paid the charge through an on­line pay­ments sys­tem (nppr.ie).

You should have got a re­ceipt at the time you paid the charge (as­sum­ing you paid it) — and it is this re­ceipt which you pro­vide to your seller as proof that you have paid the NPPR. If you can’t find this re­ceipt and are un­sure if you paid the NPPR, check with your lo­cal au­thor­ity. As long as you have paid the charge, your lo­cal au­thor­ity can then is­sue you with a cer­tifi­cate of dis­charge to con­firm that the NPPR has been paid.

Should you be sell­ing a prop­erty which was li­able for the NPPR for some years but not li­able for it for other years, you must get a let­ter of ex­emp­tion from your lo­cal au­thor­ity spec­i­fy­ing the years that the prop­erty was not li­able for the NPPR. (For ex­am­ple, if the prop­erty was your sole home for some of the years which fell be­tween 2009 and 2013, you would have been ex­empt from the NPPR for the years that you lived in the home.)

Get­ting a let­ter of ex­emp­tion can be tricky. Some lo­cal au­thor­i­ties re­quire proof that you were liv­ing in the home for the years that the prop­erty was ex­empt from the NPPR. That proof could in­clude util­ity bills or tax let­ters (in your name) to the prop­erty ad­dress. With some lo­cal au­thor­i­ties, you must fill out a statu­tory dec­la­ra­tion form where you state the years that the prop­erty was ex­empt from the NPPR. You must fill out and sign this form in the pres­ence of a prac­tic­ing so­lic­i­tor, peace com­mis­sioner or com­mis­sioner for oaths — who must then stamp the doc­u­ment. The so­lic­i­tor in this case can­not be the same so­lic­i­tor as the one you have ap­pointed to han­dle the sale of your prop­erty. You can ex­pect to be charged about €10 by a so­lic­i­tor for this ser­vice (of­ten re­ferred to as the swear­ing of a doc­u­ment).

There are some prop­er­ties (such as granny flats, mo­bile homes and car­a­vans) which were ex­empt from the NPPR. Some peo­ple (such as those who had an in­ter­est in a sec­ond prop­erty as a re­sult of a ju­di­cial sep­a­ra­tion or di­vorce) — were ex­empt from the NPPR. Full de­tails of ex­empt prop­er­ties and peo­ple can be found on nppr.ie. in 2013 — with a half-pay­ment due that year. A full-year LPT pay­ment was due in 2014 and sub­se­quent years.

There was also a pre­cur­sor to the LPT — the €100 house­hold charge — in 2012. Should you be sell­ing a home which you have owned since — or be­fore — 2012, you must prove that all LPT due (in­clud­ing the house­hold charge) on the prop­erty has been paid. To do this, get a print-out of your LPT record from the Rev­enue Com­mis­sioner’s prop­erty tax web­site (lpt.rev­enue.ie/lpt-web). This record should also in­di­cate whether or not you have paid the house­hold charge. Al­ter­na­tively, you can write to Rev­enue and re­quest a let­ter con­firm­ing that there is no out­stand­ing LPT due on the prop­erty.

If you have not paid all the LPT bills due on the prop­erty, you must set­tle any out­stand­ing bills (and any sub­se­quent penal­ties) be­fore you sell. You may also need to get clear­ance from Rev­enue if there has been a sig­nif­i­cant in­crease in the de­clared value of your home (for prop­erty tax pur­poses) in May 2013 — and the sale price which you have se­cured for your home. The dif­fer­ence be­tween the de­clared value and the sale price must fall within spe­cific lim­its set by the Rev­enue. Oth­er­wise, you may need to pay ad­di­tional prop­erty tax be­fore you can sell your home — par­tic­u­larly if you de­lib­er­ately un­der­val­ued your home so that you would pay a lower prop­erty tax.

There are some prop­er­ties which are ex­empt from the LPT. For ex­am­ple, prop­er­ties bought in 2013 are ex­empt un­til the end of 2019 as long as the prop­erty is and has been used as your sole or main res­i­dence. Cer­tain prop­er­ties in ghost es­tates are also ex­empt, as are prop­er­ties with a lot of pyrite dam­age. You must pro­vide the seller with de­tails of any ex­emp­tion to the LPT or house­hold charge which you have claimed. those charges by the end of this year. De­spite this, you must still cur­rently prove that no wa­ter charges are owed on your home if you are sell­ing it. “Un­der cur­rent gov­ern­ment leg­is­la­tion, a prop­erty seller needs to pro­vide ev­i­dence that the prop­erty has no out­stand­ing bills with Ir­ish Wa­ter — or that the prop­erty is not con­nected to the Ir­ish Wa­ter net­work,” said a spokes­woman for Ir­ish Wa­ter.

Should there still be wa­ter charges out­stand­ing on your home, you must pay what­ever is owed.

You must get a cer­tifi­cate of dis­charge from Ir­ish Wa­ter con­firm­ing that all wa­ter charges have been paid — and then pro­vide your so­lic­i­tor with this cer­tifi­cate. Al­ter­na­tively, you can in­struct your so­lic­i­tor to deduct any un­paid wa­ter charges from the sale pro­ceeds.

Land­lords are in a dif­fer­ent po­si­tion. Should you be sell­ing a prop­erty which you have rented, it is typ­i­cally the ten­ants who pay the wa­ter charges and so you must get a let­ter of non-li­a­bil­ity from Ir­ish Wa­ter stat­ing that you are not li­able for wa­ter charges at the home you are sell­ing.

Newspapers in English

Newspapers from Ireland

© PressReader. All rights reserved.