The Fanning Loophole


joe_duffyIf you sell your home at the end of this year YOU are still liable for property tax until November next year.

Yeah whatever

But all is not lost.

Dublin solicitor Caroline Fanning contacted Liveline on RTE R1 this afternoon to tell Joe Duffy about a potential loophole the revenue overlooked.

It may involve throwing a “sickie”.

Caroline Fanning: “I decided to go back and have another look at the Finance Act 2012, which is the relevant legislation – and in that Act, it imposes this tax on people who are deemed to be liable persons, as of the 1st November 2013 – so they are liable for the 2014 tax.
“But if you read on further through that Act, if you look at Section 5.2, Sub Section A2. Sub Section 5.2 says that, ‘A residential property won’t be deemed to be a relevant residential property where the property has been vacated by the liable person for a period less than 12 months.’
“It doesn’t specify if that period is one day, or one hour – it just says less than 12 months – and where a GP is satisfied that that person is unlikely to resume occupation of that property, provided that the property is not occupied by another person.
It’s an interpretation of this section, because it’s very loose, because the rest of the section is in terms of a person who has a long term mental or physical infirmity, which is Section 5.2A Sub Section 1, but there’s no link between Sub Section 1 and Sub Section 2 – so you can read Sub Section 2 in its entirety as a stand-alone sub section.
So, therefore, if somebody sells their property tomorrow and goes to their doctor and says, ‘I’ve sold my property, I’ve given my keys to them, I’ve got the money in my bank account, I’m never going to live there again.’ – and their doctor is satisfied that that is the case, and that the new owner hasn’t immediately resumed occupation of the property – say a couple of days’ grace, moving stuff out, or builders, or whatever, their GP, if they certify that that person won’t be resuming occupation, that person has complied with Section 5.2A, Sub Section 2, that the property is not going to be a relevant residential property and therefore, they are not liable for the tax.”

Joe Duffy: “But they would say there is subsidiarity in Sub Section 5.2A1?”

Caroline Fanning: “The last word in Sub Section 5.2A1 is ‘or’, which means that either one will apply – so I think that under this interpretation of statute for a penal tax, or something penal is happening to the citizen that you’re able to construe that legislation in favour of the citizen – and I think that in this case, it’s definitely a case to be made.”

Joe Duffy:
“And Caroline, you are a solicitor, I see, it’s very very well spotted. Have you ever beaten Revenue in interpretation?”

Caroline Fanning: “I’ve beaten – I’ve won on certain things in going back..{Joe interrupts}.”

Joe Duffy: “You’re saying, your belief is that if you read this in a particular way – in the way it’s written, that anyone who does sell their house in November or December this year – at the moment they are being hit by the property tax – even though they have no access or use of the house, or ownership of the house, they will be hit for property tax for next year. You’re saying that what you should do is, regardless of your mental or physical state, you go to a GP, and you get a letter from a GP saying, ‘I will not be…{Caroline interrupts}

Caroline Fanning: “…they are satisfied that you will be unlikely at any stage to resume occupation of the property’ – which is the wording in the legislation.”

Joe Duffy:
“And you can send that into Revenue and that exempts you?”

Caroline Fanning:
“Well, there’s definitely a case to be made.”

Joe Duffy: “Revenue will say that this was aimed at people going into a nursing home?”

Caroline Fanning: “But there’s no link between the two, you can read them in their entirety.”

Joe Duffy: “So what you’re saying is 5.2A2 should actually be 5.2A and should be part of 5.2A1 and there shouldn’t be a break?”

Caroline Fanning:
“Well, that would be up to the drafters of the legislation, but there’s definitely an interpretation to be made that could apply to those people that are being hit for property tax for next year.”

Joe Duffy: “But the GP will laugh – if you were to say, ‘Will you exempt me from my property tax?”

Caroline Fanning: “That would be up to the GP, I’m sure some would be sympathetic.”

Joe Duffy: “That’s fascinating, well spotted – and best of luck with it Caroline!”

Caroline Fannning: “Thank you.”


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(Photocall Ireland)