A property sale can appear ready to close until an outstanding Local Property Tax return, an unverified exemption or an historic payment balance stops the transaction.
By that stage, the consequences are immediate. The seller may need to discharge tax and interest at short notice. The buyer’s solicitor may refuse to complete. Funds, removals and linked transactions may all depend on a closing date that can no longer be met.
Local Property Tax clearance deserves attention at the start of a sale, not in the final days before closing.
What does LPT Revenue clearance confirm?
Revenue clearance confirms that a residential property complies with its Local Property Tax obligations for the purposes of a sale, gift, inheritance or other transfer.
LPT clearance must be in place before the transaction completes. The process protects the buyer because unpaid LPT, together with associated interest and penalties, forms a charge on the property. That charge remains attached to the property until someone pays it in full. A buyer who acquires a property with an outstanding charge may become liable for it. Revenue’s guidance therefore requires both parties to establish the LPT position before closing.
Clearance addresses two related questions:
- Have all required returns been filed and all liabilities paid?
- Does the property’s declared valuation satisfy Revenue’s clearance rules?
A payment receipt alone does not answer both questions.
Outstanding liabilities and returns block clearance
A property will not qualify for general or specific clearance if its record shows:
- outstanding or deferred LPT;
- unpaid interest or penalties;
- outstanding Household Charge liabilities; or
- an LPT return that should have been filed but remains outstanding.
Paying a Revenue estimate does not cure an unfiled return. The seller must file the return so that it replaces the estimate on the property’s record.
The solicitor should also check any exemption or deferral. Revenue must verify an exemption before the property can be sold or transferred. If the seller claimed an exemption incorrectly, they must amend the return, remove the exemption and pay the resulting LPT and interest.
A deferral creates a different issue. On an ordinary sale, the seller must generally discharge the deferred liability and accrued interest before closing. Revenue may allow a deferral to continue on a gift or inheritance where the recipient independently qualifies, claims the deferral and the appropriate notification reaches Revenue.
These issues often take longer to resolve than clients expect. Revenue advises that payments can take up to 72 hours to appear, even before allowing time for amended returns, interest calculations or exemption reviews.
General clearance and specific clearance
Revenue provides two routes: general clearance and specific clearance.
General clearance
General clearance does not require a formal application. It applies where the property’s LPT record is fully compliant and the transaction meets one of Revenue’s safe-harbour conditions.
Under Revenue’s current rules, the first condition applies where the sale price does not exceed:
- €500,000 for a property in Dublin; or
- €400,000 for a property outside Dublin.
If the price exceeds those thresholds, general clearance may still apply where it falls within the permitted valuation margin. Revenue currently compares the sale price with the valuation declared for 1 November 2021. Broadly, the sale price must not exceed the upper limit of the declared valuation band by more than 25%. For properties valued above Band 19, Revenue applies the 25% margin to the actual value declared.
The seller must also ensure that the valuation declared as at 1 November 2025 reflects the sale-agreed price. That valuation determines the LPT charge for the 2026–2030 valuation period. Revenue sets out the applicable conditions in its current clearance guidance.
Where general clearance applies, the seller or their solicitor obtains an up-to-date Property History Summary through LPT online. It should confirm that all required returns have been filed and all tax, interest and penalties have been paid.
Specific clearance
If the transaction falls outside the general clearance conditions, the seller must apply for specific clearance using Form LPT5.
Revenue then examines whether the valuation declared for the relevant period was reasonable. The application should include persuasive supporting evidence, such as a professional valuation, comparable sales, property photographs and relevant market data.
Revenue generally processes a complete application within 12 working days. That is a target rather than clearance by default: if Revenue has not issued its decision, the parties cannot assume approval.
This route frequently affects higher-value property sales. The need for specific clearance should never emerge during the closing week.
How an LPT problem affects each party
For the seller, an unresolved LPT issue may mean an unexpected tax payment, interest, professional valuation costs and a delayed release of the sale proceeds. It can also disrupt an onward purchase.
For the buyer, the concern is more serious than administrative inconvenience. The buyer needs clean title, free from an unpaid LPT charge. Their solicitor must examine the clearance documentation, the payment history and the reasonableness of the property’s earlier valuations.
For the transaction, every unresolved point adds uncertainty. A missing return may take little time to file, but an undervaluation, disputed exemption or specific-clearance application can change the closing timetable materially.
The liability date can also surprise sellers. A person who owns the property on 1 November remains liable for LPT for the following year, even if they sell before that year begins. For example, a seller who owned the property on 1 November 2025 must file the 2026 return and pay the 2026 charge before completing a later sale.
Property clearance is not personal tax clearance
LPT Revenue clearance should not be confused with a general Tax Clearance Certificate covering the seller’s wider tax affairs.
The LPT exercise relates to the identified property. Revenue uses the seller’s PPSN, Property ID and access details to authenticate access, but the Property History Summary contains property-related information only. It records matters such as returns, payments, balances, interest, penalties, exemptions and declared valuations. It does not certify the seller’s overall personal or business tax compliance.
The solicitor must examine both the payment status associated with the property and its valuation history. A seller may have paid every displayed charge but still lack clearance because a return remains unfiled or the sale falls outside the general valuation conditions.
What the solicitor should do before closing
The solicitor acting for the seller should begin the LPT review as soon as instructions arrive. We would expect the file to include the following steps:
- Obtain the Property ID and access information.
- Review the Property History Summary for every relevant year.
- Confirm that all returns have been filed.
- Identify unpaid tax, interest, penalties, Household Charge arrears or deferrals.
- Check that Revenue has verified any exemption.
- Review the valuations declared for 2013, 2021 and 2025, together with their supporting basis.
- Compare the agreed price with the current general-clearance thresholds.
- Correct any undervaluation and discharge the resulting liability.
- Submit an LPT5 application promptly if specific clearance is required.
- Provide the buyer’s solicitor with the final Property History Summary and relevant clearance documentation.
The buyer’s solicitor should carry out an independent review rather than treat the Property History Summary as a box-ticking exercise. Revenue’s detailed LPT clearance manual expressly requires the purchaser to consider whether the seller’s valuations appear reasonable and honestly made.
The solicitor’s role is straightforward: identify the issue early, establish what Revenue requires and build enough time into the transaction to resolve it. Clients should expect clear advice on any liability, the documents Revenue needs and whether the proposed closing date remains realistic. That early work protects the seller’s timetable and ensures the buyer acquires the property without an avoidable LPT charge.
About the author: William Donovan is a seasoned Conveyancing Solicitor and Property Law Expert at HOMS Assist, with nearly three decades of experience in residential property transactions and compliance. His deep understanding of residential property law, reflects his commitment to providing clear, actionable advice to private individuals navigating Ireland’s evolving property landscape.
