Interesting tax law anomaly: FTB stamp duty exemption

minikin

Two unmarried individuals are completely separate legal entities when it comes to tax, separate tax allowances etc.

However it appears that their autonomous status is completely disregarded when it comes to the thorny issue of first time buyers stamp duty exemption.

If one of the party has previously obtained the exemption, the other individual has absolutely no right to claim their portion of the exemption (One would imagine this inequitable situation should be dealt with by way of a 50% derogation of the stamp duty, in the case where they buy on equal terms)

Surely one is either treated as an individual for tax purposes or they're not.

Interested to see what people think, is this an anomaly?
Is there a reason why this transaction tax, which applies to instruments of property as a whole, could not be applied separately to each party of the transaction?

fowler100

The first time buyer's relief applies to married couples as well, so if you marry and your spouse has already obtained the stamp duty relief, you cannot avail of it if when you are purchasing a house together in the future.

minikin

yes but in the case where there's no legal bond between the two people surely it's not constitutional to take the other persons status into account.

i.e. surely the two individuals should be treated separately - no exemption for the person who is not a f.t.b. (they pay half the requisite stamp duty), whilst the f.t.b pays no stamp duty.

fowler100

If, as you argue, we were to treat co-habiting couples more favourably than married couples I think then that there would be a constitutional argument.

The rule was originally brought in because married couples who already owned their principle residence began to take advantage of the fact that the other spouse could avail of the relief for an investment property, which was of course against the purpose of the relief.

minikin

ah, but being a married couple they would both own a beneficial interest in their existing property... neither of them could avail of f.t.b. with an investment property because it wouldn't be their principal place of residence.

I'm not arguing that we treat co-habiting couples more favourably than married couples. I haven't even said I was talking about a 'couple', not to mention any reference to their living arrangments. I'm talking about two individuals - completely distinct individuals in law.

I don't see how it is constitutional to have your own entitlements affected by that of another individual.

For instance, if I were to apply for motor insurance and was told I couldn't get a lower premium because my (for the sake of argument) girlfriend had made a claim, clocked up points or benefited in some way from a reduced premium we would not accept it as being lawful.

fowler100

If I have buy a house and then get married, my spouse does not gain an automatic benificial interest in my home.

If I move in with an individual (unconected) and he/she buys the house and my name is not on the deed, I do not lose my fbr.

Our man in Havana

fowler100 wrote: »

If I have buy a house and then get married, my spouse does not gain an automatic beneficial interest in my home.

That is not what the Revenue think.

johnnyskeleton

minikin wrote: »

I don't see how it is constitutional to have your own entitlements affected by that of another individual.

It's not an entitlement; the oireachtas has decided to give an exemption to persons who buy property and none of whom have purchased a previous property. They have also decided that a married couple get the exemption if one of the parties has not previously purchased a property. The courts are very unwilling to interfere with the government's discretion when it comes to fiscal instruments, and they would not look at it from the point of view of whether it is fair or unfair to persons in that situation.

Victor

Note that Stamp Duty applies to property, not people.

minikin wrote: »

yes but in the case where there's no legal bond between the two people

There is - the property.

minikin

Thanks to all for the replies!
Very interesting, looks like the status quo will remain.
equity bedamned

smellyanus

When I was in college I couldnt get rent allowance because my bird was working, and we were classed as a couple. My arguement was fine, we would pool both our tax credits and then she wouldnt pay tax........not allowed as we were not married.
They make the rules to suit themselves.