Expert Advice Needed

stooge

Hi,

Could someone with legal/renting/estate agent/stamp duty knowledge please answer the following question:

Are Estate Agents allowed to charge stamp duty on rental property?

i.e.

A house to rent for 2000 EUR a month. The total yearly rent is therefore 12x2000 = 24000EUR#

On the Estate Agents website it states

"Stamp duty on a letting agreement is due when the total amount of rental income during the agreed letting term is more than €19,500. It is calculated at 1% of the total rent plus €12.50."

12.50 + 240 = 252.50 EUR.

Now admitedly its not a huge amount of the toal yearly rent but its still more.

My main question is, Is this legal? Has anyone heard of this before or even paid it?


Cheers,

Stooge

mastermind2005

Name and shame them at least, it sounds like another dumb tactic to try con people into give away more of there money.

Jo King

Stamp duty is paid to the Revenue Commissioners, not Estate Agents. Look at the revenue website www.revenue.ie for details. It is standard practice to collect the stamp duty on signing of the lease so t5hat the lease can be stamped as required by law.

juke

The simple answer is yes.

Stamp duty on leases is payable by the tenant - I presume the estate agent charges it to ensure it is paid, and on time, otherwise, the landlord could have difficulties relying on the lease at the RTB for eg (not valid if not stamped)

stooge

I dont see why tenants should have to pay stamp duty on a 1 year lease. After all, tenants are only renting the house, they wont own it at the end.

With rents the extortionate amount they are, its really taking the p1ss.

@ Jo King - maybe its just me but I cant find a document on the revenue website where it says tenants are liable for stamp duty? Can you provide a specific link?

@ Juke - same thing as above really. Is there document that states this? I'm not one for paying extra just because someone says so. Concrete proof please!

antoinolachtnai

It is up to tenants, not landlords to pay the stamp duty, in the same way it is up to purchasers, not sellers to pay stamp duty when a house changes ownership.

There has always been stamp duty on leases above a certain amount. The problem is that rents are now becoming higher than the amount (19000 euros or so).

http://www.revenue.ie/revguide/stampduty.htm

The lessee is liable for the duty as I understand it. It is nothing to do with the landlord or the agent.

North&South

stooge wrote:

I dont see why tenants should have to pay stamp duty on a 1 year lease. After all, tenants are only renting the house, they wont own it at the end.

With rents the extortionate amount they are, its really taking the p1ss.

Hi all, well, I'm new to these boards - Hubby & I & our 24 yr old daughter are moving across to Ireland from the UK in about 4 weeks time & are looking for a rural property, large, with a bit of land, or large gardens, etc etc.

Stooge, I have to totally disagree with you at the moment about the huge rental prices, based totally on our experience of the prices here. :eek:

My eldest rents a 3 up, 3 down, (2bedrooms, bathroom, sitting room, dining room & kitchen) terraced house, with a small concrete back yard - decorative order is diabolical & she pays the equivalent of 720 euros a month.
Now, add to that the cost of council tax & water rates, it brings it to 930 euros a month.
I've been scouring the daft.ie website for properties in the Galway & Cork areas and we can get a 5 bed, 3 bath, conservatory, & half an acre property for that!
PLUS you have tax relief on rent you pay - what's that all about?
PLUS you still get MIRAS on mortgages, married tax relief if one partner doen't work... blimey, and you think your rents are high?
Try living over here with our tax system!! :mad:

stooge

North&South wrote:

Hi all, well, I'm new to these boards - Hubby & I & our 24 yr old daughter are moving across to Ireland from the UK in about 4 weeks time & are looking for a rural property, large, with a bit of land, or large gardens, etc etc.

Stooge, I have to totally disagree with you at the moment about the huge rental prices, based totally on our experience of the prices here. :eek:

My eldest rents a 3 up, 3 down, (2bedrooms, bathroom, sitting room, dining room & kitchen) terraced house, with a small concrete back yard - decorative order is diabolical & she pays the equivalent of 720 euros a month.
Now, add to that the cost of council tax & water rates, it brings it to 930 euros a month.
I've been scouring the daft.ie website for properties in the Galway & Cork areas and we can get a 5 bed, 3 bath, conservatory, & half an acre property for that!
PLUS you have tax relief on rent you pay - what's that all about?
PLUS you still get MIRAS on mortgages, married tax relief if one partner doen't work... blimey, and you think your rents are high?
Try living over here with our tax system!! :mad:

Hi there, firstly, you may get a different result if you compare rent prices in dublin to those areas you are looking at in Cork/Galway. A similar proerty you mention above in a half decent area in dublin would cost in the region of 4000 at the very least. The need for rental houses in Dublin far outweighs anywhere else in Ireland resulting in landlords upping rent. For example, the cheapest I can see for a 2bed apartment in a half decent area is around 1500 Euros. Now for that price I could get a 4 or 5 bed house in Limerick or just outside Cork.

The point is, that rent has gone up in dublin in the last 6-10months. My own rent was increased from 550 to 650 for a single room. Granted, I get tax relief on this but at the end of the day we are paying a sh1t load of money for fairly sh1t houses. Try looking for houses in dublin that match your criteria and tell me if you still disagree.

Anyway, back on topic, its typical of ireland to levy this 'stamp duty' for renting on the tenant rather than the landlord. The rich owner gets more money and the poor tenant forks out more. Suppose it forces people to go and get on the porerty ladder.

Victor

stooge wrote:

Anyway, back on topic, its typical of ireland to levy this 'stamp duty' for renting on the tenant rather than the landlord. The rich owner gets more money and the poor tenant forks out more. Suppose it forces people to go and get on the porerty ladder.

If it was levied on the landlord, it would largely be passed on to teh tenant anyway.

I suspect it is there to discourage hire-purchase type contracts on property.