Seller's Property Guide
Selling a property is made considerably easier when the vendor knows the documentation that needs to be prepared and the processes involved.
A vendor can either sell his/her property privately or through an auctioneer. If you opt for an auctioneer it is advisable to shop around for the most competitive price. Auctioneer fees are generally a percentage of the selling price of the property but some firms include advertising fees in this price and others add it as an extra.
Deeds to the property may be held privately by the home owner, by a solicitor or held by a lending institution as security for a loan. It is important to ascertain the location of the title deeds as quickly as possible in order for the solicitor to draft the contracts for sale.
If there is a mortgage charged against the property a deed of discharge will need to be obtained from the lending institution. If the loan is not paid off prior to the sale, it is common practice for the vendor’s solicitor to undertake to clear the loan from the proceeds of the sale and thereafter remove the charge from the property.
Capital Gains Tax
Capital Gains Tax is a tax charged on the capital gain (profit) made on the disposal of an asset by a chargeable person to include land, buildings and company shares on or after the 6th April 1974. As it is a tax on disposals gifts also come within this scope including voluntary transfers. The vendor should consult with the Revenue to ascertain the current rate of tax.
Please consult our Tax on Property Guide for further information.
Planning difficulties can arise in situations where an extension is added to a home but the owner failed to obtain planning permission or did not comply with building regulations and the development is not exempt. When selling such a property, solicitor for the purchaser will insist on a Certificate of Compliance with Planning Permission. The vendor may then need to apply for retention planning permission but should seek the advice of his/her solicitor before doing so.
BER stands for Building Energy Rating. A BER certificate informs you of how energy efficient your home is. There is a scale of A to G: A is the most efficient and G is the least efficient.
A BER Certificate remains valid for up to 10 years so long as there is no significant change to the house that could influence its energy performance.
A provisional BER may also be given and this lasts for 2 years. A provisional BER is one that is often issued for new houses based upon the house plans and building specifications.
When is a BER Certificate required?
As of the 1st of January 2009 a BER certificate is compulsory for all homes, new or existing, being sold or rented. Therefore, if you are purchasing a home, you are fully within your rights to ask the Vendor for a BER Certificate. All new homes are now required to have a BER Certificate, even where it is not being sold.
BER Certificates are also required for new non-domestic buildings for which planning permission was applied for on or after 1st July 2008. There are transitional BER exemptions in place for those new non-domestic buildings for which planning permission was applied for on or before the 30th June 2008. However, it should be noted that such transitional BER exemptions will only apply where the new non-domestic buildings concerned are significantly completed by the 30th June 2010.
BERs will be carried out by specially trained BER assessors, registered by Sustainable Energy Ireland (SEI). Such assessors are trained under the National Framework of Qualifications and it is an offence for any person who is not so trained and registered with the SEI to carry out a BER Certificate.
Non-Principal Private Residence Charge (NPPR)
The NPPR tax was an annual charge applied from 2009 to 2013 in respect of residential property that was not the owner’s only or main residence during those years. Therefore, if you owned residential property on the liability date in any of years 2009 to 2013, and it was not your primary residence on that date, you were liable to pay the charge of €200. The first liability date was 31st July 2009. For each year from 2010 to 2013, the liability date was 31st March. If you were liable to pay the charge but have not done so, penalties are applied which accrue and attach as a charge against the property.
The primary exemption to the charge is that the property qualified as a principal private residence, but other exemptions can be availed of and a vendor should contact his/her solicitor or consult the Local Government (Charges) Act 2009 for the full list of exemptions.
When selling your property the solicitor acting for the purchaser will request a Certificate of Discharge (where tax has been paid by the homeowner) or a Certificate of Exemption. These certificates can be obtained from the designated Local Authority on request. Once a certificate is obtained the owner should forward this document to his/her solicitor as it is required as part of the closing documentation.
Local Property Tax (LPT)
An annual tax (LPT) charged on all residential properties in the State came into effect in 2013.
You are a ‘Liable Person’ if you own a residential property on the liability date. The liability date was 1st May 2013 for the year 2013. For all preceding years the liability date is the 1st November. If you own the property on the 1st November in any given year you will be responsible for paying the tax for the coming year. For example, if you sell your property on the 2nd November 2015, you will be required to pay the annual LPT charge for 2016 also. The tax payment is then apportioned or split with the new purchaser.
The tax is based on the value of your property which is the market value of your property could fetch if sold on the open market. The Revenue is responsible for the collection of the tax and have allocated market value bands. The amount of tax is based on the mid-point of the relevant band. Property owners should consult with LPT on the Revenue’s webpage for correct band values and the various ways an owner can pay the tax or make a return.
When registering your property for the Local Property Tax, the Revenue will furnish you with a property I.D. and a pin number. These two numbers/codes together with your PPS number will gain you access to your specific LPT homepage which the Revenue created for you. Property owners can manage multiple properties from their allocated homepage. When selling their property an owner should click on the ‘Payment History’ icon which will bring up a list of all payments made. Property owners should print this page and forward the printout to their solicitor who will use the payment information as proof that the property is registered for LPT and that the tax has been paid since 2013. When viewing the payment history, it is important that the band value corresponds with the agreed purchase price of the property. If the tax returns are below the relevant band value owners must apply for ‘General Clearance’ from the Revenue by completing a Form LPT5. For queries on completing any documentation or for any general queries in relation to LPT, property owners can contact the LPT Helpline: 1980 200 255.
The Household Charge tax was an interim tax return of €100 for the year 2012. If you owned a residential property in Ireland on 1st January 2012 you were obliged to declare your liability and pay the tax to the Household Charge Bureau.
If your Household Charge payment was still outstanding on 1 July 2013, it was increased to €200 and added to the Local Property Tax (LPT) payable on the property. If you do not pay this additional €200, interest and penalties will apply under the LPT system.
Owners selling their property should obtain the relevant Certificate of Discharge/Receipt and forward same to their solicitor.
The Water Services Act 2014 and the Environmental (Miscellaneous Provisions) Act 2015 introduced new legislation for the payment of water rates for all residential properties in the Republic of Ireland. Occupiers/tenants of property are obliged to register with Irish Water and discharge water rates as bills arise.
The legislation requires property owners to provide information to Irish Water on the occupiers of the property within 20 days of the start of a tenancy. When selling a property the owner is obliged to furnish proof of registration with Irish Water and receipts up to the date of the closing of the sale to the Purchaser’s solicitors.
All utility service providers such as telephone and broadband, electricity and gas should be contacted and informed of any pending property sale. The services should be paid in full up to the date of closing of the sale and the accounts closed. Vouching receipts for payment and cancellation of services should be forwarded to the Vendor’s solicitor.
Steps in Selling a Property