Fianna Fáil public expenditure and reform spokesman Sean Fleming has called for changes to rules relating to the Local Property Tax to prevent vendors of houses having to pay tax on properties they will not own next year.

Mr Fleming said the liability date of 1 November was stipulated in the legislation for the property tax.

People selling houses after 1 November of this year are liable to pay property tax on those properties for 2014, even though they will not own the properties next year.

An error in the legislation relating to the tax means that all owner-occupier property buyers in 2013 are entitled to an exemption from the property tax for the next three years.

The Law Society says it has received a large number of queries from legal practitioners working on property sales, over whether vendors or purchasers should be paying the Local Property Tax.

Lawyers say people selling houses at the moment say it is unfair that they should have to pay the property tax for next year.

Mr Fleming said people who were in the process of selling houses over the past few months now have to renegotiate the price to reflect the property tax liability.

He said this is causing a log-jam in the system in relation to banks and the legal profession.

Mr Fleming said Minister for Finance Michael Noonan could bring an amendment to the Finance Bill, which is due to go through committee stage in the Oireachtas next week, to correct the problem.

Revenue says no confusion over liability

Meanwhile, Revenue has insisted that there is no lack of clarity surrounding the liability.

A spokesperson for Revenue said the liability date of 1 November was settled and had been approved by the Oireachtas.

The spokesperson said whatever date was prescribed, the question of liability when there is a change of ownership had to be managed.

The Revenue spokesperson said they would expect that the LPT liability involved would be factored in during negotiations between parties on the sale price and closing date of a particular contract.

Outstanding Local Property Tax Returns have to be filed and any tax due must be paid prior to the completion of a house sale.

The Revenue spokesperson said that having a liability date before the year commences was preferable from an administrative point of view as there is certainty about who the liable person is for the coming year.

The spokesperson said the liability date was not a significant issue on the helpline for the Local Property Tax.

Revenue does not have a detailed breakdown of the number of calls received on the subject.