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The profession will be aware that any arrears of Household Charge (for the year 2012) are collected by Revenue through its LPT system and will be shown as outstanding on the LPT Property History Screen. Purchasers will insist on any arrears being discharged by a vendor prior to closing.

The Conveyancing Committee has become aware that Revenue, in the course of auditing payment of the Household Charge, may come across cases where owners (including previous owners on title) had not declared a relevant property for the purposes of the Household Charge. In these cases, Revenue amends the Property History Screen to reflect unpaid arrears. Where it is the current owner of the property who did not declare it, the matter is dealt with in the usual way by discharging the arrears due prior to any sale of the property.

However, a difficulty arises where the person who owned the property as of 1 January 2012 (the liability date for the 2012 charge) did not declare the property for Household Charge purposes and Revenue did not discover the failure to declare until after that previous owner had sold it. The current owner would have purchased the property in good faith, having relied on there being no outstanding arrears of Household Charge appearing on the Property History Screen at the time of purchase.

If Revenue subsequently places a note of unpaid arrears on the Property History Screen after such a purchase in good faith has taken place, it puts the current owner in the invidious positon of being unable to close a sale of the property to a current purchaser without addressing the question of unpaid arrears that are properly the liability of another taxpayer, that is, the owner as of 1 January 2012. Because any unpaid arrears are a charge on property for a period of 12 years after they fell due, this is a matter of title on which the current vendor must satisfy a purchaser before closing.

The committee’s view is that:

1. A current owner in the case outlined above should not be required to discharge another taxpayer’s liability where the LPT Property History Screen showed no outstanding arrears of Household Charge at the time s/he purchased the property,
2. It is the responsibility of Revenue to pursue the owner as of 1 January 2012 for any outstanding liability to Household Charge for 2012 and for any failure to declare the property for Household Charge at that time, and
3. Revenue should provide the purchaser with a letter confirming that there is no charge on the property in respect of the sum due by the owner as of 1 January 2012.

The committee has taken the matter up with Revenue, but no clarification has been received to date from Revenue. The committee will advise the profession in due course of any progress on that front. In the meantime, the committee advises solicitors acting for current owners seeking to sell or mortgage their property to apply to Revenue for a letter in the terms outlined at paragraph 3 above.