Local Property Tax – Who is liable?

As everybody now knows if you are the owner of a residential property on the 1st of May, 2013 you are liable for Local Property Tax. In most cases it is obvious who is liable for the tax but there are some situations where this may not be clear and the question will arise – who has to pay? The legislation is very widely drawn. Anybody who has a legal interest in a house which entitles them to possession for a period which may equal or exceed 20 years or entitles them to receive a rent out of the house for such a period is liable to pay the tax.

  1. If you are tenant in a house then it is the landlord and not you who are liable but if it is a long term lease of 20 years or more then it is the tenant who is liable.
  2. If you have a life interest in a house or an exclusive right of residence then you are regarded as the owner for the purposes of the tax and it is you who are liable. The right of residence must be exclusive. If the true owner of the house has a legal right to reside in the house with you then it is the true owner and not you who are liable.
  3. The personal representative of a deceased owner is liable but if the beneficiary under the will or intestacy is occupying the house then it is that beneficiary who is liable to pay the tax. There is a difference here between the position of deceased’s owners under this tax and the position under the NPPR and Household charges. In the case of the NPPR and Household charge where the true owner was deceased and no Grant of Representation had issued to his or her estate then for the purposes of those taxes there was no “owner” on the liability date and therefore liability for the NPPR charge and Household charges did not arise. This loophole has been closed for this tax.
  4. Trustees are liable but if the house is occupied by a beneficiary of the trust then the beneficiary is also liable.
  5. Anyone who owns a house jointly with a Local Authority under a Shared Ownership Scheme is liable because they have possession of the house.
  6. It is not necessary for your legal title to be in order to make you liable. If you are in possession and have a prima facie right to apply to the Land Registry to be registered as owner then you are liable for the tax.
  7. Persons who are non-resident in Ireland but who own an Irish house are liable. Indeed these persons, and anybody else who owns a second house, will also be liable this year for the NPPR charge of €200.00.
  8. If two or more people own a house or are liable for the tax and if none of them pay the Revenue Commissioners can collect the tax due from any one of them.

It will be very difficult for any house or house owner to escape liability for this tax.