Stamp Duty Question\Changes?

dvoakes

--On behalf of my girlfriend--

She has recently gone sale agreed on a house for 380k with her Mother's Partner as Guarantor on the house. All survey's completed and things are moving along nicely until last friday her Solicitor rings her to inform her that seen as her Guarantor is not a first time buyer that she may have to pay Stamp Duty.

Now, the guarantor will not have his name on the deeds or any part of the mortgage he is literally a guarantor he is not even insured for the full sum of the house as the Bank are happy that it is only a short term measure having him on the house and that he will be coming off it in a few years time.

The thing is that according to the solicitor and since the abolition of Stamp Duty that there is a possibility that the Revenue Commissioners will look to get Stamp Duty from her because of her Guarantor. I can't myself see how they could justify this. She rang them on Friday afternoon was told that they dealt with it on a case by case basis and the girl with whom she spoke wouldn't even give her name.

Has anyone been in this situation or got any advice as it's the difference of 23k and either buying the house or not buying it.

If she signs for the 10% with the Solicitor this thursday and they then look for Stamp Duty then the 10% is lost if she can't afford the stamp duty. Has anyone got any idea's?

Regards,
dv

Victor

Note that as the legislation hasn't passed yet, that she may have to finance the Stamp Duty anyway and wait for a refund.

El Stuntman

drop the purchase, wait two years and buy for 220k instead

MysticalSoul

I cannot see how the Revenue would be able to enforce this, as the guartor is with the Bank and not the Revenue. Provided there is only one person's names on the Deeds, I cannot envisage any problem. At work we deal with the Revenue on a regular basis, and sadly, they are consistantly inconsistent.

dvoakes

This is what I've found on their website. I think that criteria fits but once again it's the Revenue and they are a law unto themselves.


c) Revenue is prepared to accept that a child, who is a first time buyer, will not be precluded from claiming first time buyer relief where a parent acts as a co-mortgagor in the following circumstances-
• The transfer of the property is taken in the name of the first time buyer (which it is)
• It is the intention of both the first time buyer and any other person that the other person is not to take a beneficial interest in the property (which he isn’t)
• The other person has been joined into the mortgage solely at the request of the lending institution for the purpose of providing additional security for the monies being advanced for the purchase (additional security being the operative word otherwise i doubt she would have got 100%)
• It is not intended that the other person will be contributing to the repayment of the mortgage in the normal course (which is true again)
Where the four conditions set out above are satisfied, Revenue will treat the parent as effectively acting in the role of guarantor for the loan.
Consistent with the above approach, Revenue will also be prepared to treat persons other than parents of the first time buyer, who satisfy similar conditions to those set out above, as effectively acting in the role of guarantor for the loan. Their involvement in that capacity will not be treated by Revenue as precluding a claim to first time buyer relief.

godtabh

dvoakes wrote:

--On behalf of my girlfriend--

She has recently gone sale agreed on a house for 380k with her Mother's Partner as Guarantor on the house. All survey's completed and things are moving along nicely until last friday her Solicitor rings her to inform her that seen as her Guarantor is not a first time buyer that she may have to pay Stamp Duty.

Now, the guarantor will not have his name on the deeds or any part of the mortgage he is literally a guarantor he is not even insured for the full sum of the house as the Bank are happy that it is only a short term measure having him on the house and that he will be coming off it in a few years time.

The thing is that according to the solicitor and since the abolition of Stamp Duty that there is a possibility that the Revenue Commissioners will look to get Stamp Duty from her because of her Guarantor. I can't myself see how they could justify this. She rang them on Friday afternoon was told that they dealt with it on a case by case basis and the girl with whom she spoke wouldn't even give her name.

Has anyone been in this situation or got any advice as it's the difference of 23k and either buying the house or not buying it.

If she signs for the 10% with the Solicitor this thursday and they then look for Stamp Duty then the 10% is lost if she can't afford the stamp duty. Has anyone got any idea's?

Regards,
dv

I bought like this with my dad as Guarantor. Didnt have to pay any stamp duty. Your Guarantor is only guaranting the home they arent buying it.

El Stuntman wrote:

drop the purchase, wait two years and buy for 220k instead

Very helpful comment.
What was the fromula you used to go from €380k to €220k. Sounds like you just pulled it out of your ass

El Stuntman

kearnsr wrote:

Very helpful comment.
What was the fromula you used to go from €380k to €220k. Sounds like you just pulled it out of your ass

I expect prices drops of 40% over the next two years, that's where I got the number from...

I agree my comment was OT but I was trying to make a semi-serious point i.e. anyone buying this year needs their head examined as we are undoubtedly on a downslope and gathering speed

sorry if I offended you

godtabh

El Stuntman wrote:

I expect prices drops of 40% over the next two years, that's where I got the number from...

I agree my comment was OT but I was trying to make a semi-serious point i.e. anyone buying this year needs their head examined as we are undoubtedly on a downslope and gathering speed

sorry if I offended you

I've bought this year and I defo dont need my head examined and I'm sure the same thing applies to the vast majority of owner occupiers. Different story for investors though.

Again I'd like to see where you got the 40% from it seems very arbitrary.

Apartments were I live have gone are being sold for 10% more then I purchased.

The housing market isn't as black and white as people try and make it out to be.

No offence taken but they way but I didnt think your advice was warranted or valid.

dvoakes

Kearnsr thanks a lot for your comment. Was that only recently? I'm happy someone has been in the same boat and come through it. We're you warned that this may be the case while you were buying or was everything stamped no problem?

godtabh

dvoakes wrote:

Kearnsr thanks a lot for your quote. Was that only recently? I'm happy someone has been in the same boat and come through it. We're you warned that this may be the case while you were buying or was everything stamped no problem?

In the last couple of weeks.

dvoakes

El Stuntman - I'll buy a hat, then eat it if prices drop by 40% over the next two years.

El Stuntman

I believe the residential market to be at least 40% overvalued based on price to income ratios (over ten times average industrial wage to average HP, unsustainable), affordability constraints (there are almost no FTBs in the market right now and many people who have bought in the last few years are currently stretched to the max) and the existence of a speculative bubble. I expect that these imbalances will be corrected rather viciously over the next 2/5 years, especially given that we have no monetary policy defences left to us.

El Stuntman

dvoakes wrote:

El Stuntman - I'll buy a hat, then eat it if prices drop by 40% over the next two years.

mmm, tasty hats

as a gambling man, I like this wager...

what do I have to eat if they don't?

and why do you believe prices won't fall by this amount???

godtabh

El Stuntman wrote:

what do I have to eat if they don't?

Your ma!

El Stuntman wrote:

and why do you believe prices won't fall by this amount???

House prices will always go up and down but to fall by that amount in a short space of time I cant see happening.

A massive reduction in price would cause a big demand which would push prices up.

I reckon that the house prices will level out with rises of +- 5-10%

El Stuntman

kearnsr wrote:

I reckon that the house prices will level out with rises of +- 5-10%

so you basically believe that houses are fairly valued at present? i.e. a valuation of 10 times average earnings for the average dwelling is 'normal'?

that's interesting, but I suggest we take this over to the main bubble thread as we have already clogged up this one enough!

EKRIUQ

El Stuntman wrote:

I believe the residential market to be at least 40% overvalued based on price to income ratios (over ten times average industrial wage to average HP, unsustainable), affordability constraints (there are almost no FTBs in the market right now and many people who have bought in the last few years are currently stretched to the max) and the existence of a speculative bubble. I expect that these imbalances will be corrected rather viciously over the next 2/5 years, especially given that we have no monetary policy defences left to us.

Your not George Lea are you???? :eek: :eek: :eek:

With that rational and forward thinking I hope the sun keeps shininf

El Stuntman

BingoBongo wrote:

Your not George Lea are you???? :eek: :eek: :eek:

With that rational and forward thinking I hope the sun keeps shininf

damn I'm exposed!

what sun?

Victor

OK, folks, cop on.