Contract Price

airman737

Hello All. I am in the process of a house purchase. My solicitor has return the contractst o the vendors solicitors for changes to be made to it. One of the consitions is as follows:


"1. Please confirm that the contract price of €22,000 is inclusive of VAT and on closing you will furnish a VAT invoice. Please specify the amount of VAT now."

Can someone tell me what this is?

Thanks in advance

Victor

A straightforward transaction involving property, e.g. the sale of land or a second hand house attracts stamp duty, but no VAT.

A sale of an 'developed' property, e.g. a newly constructed building attracts VAT, but no stamp duty.

So, your solicitor is seeking clarification that the €22,000 includes VAT - that the total amount the property (not including expenses like solicitor, surveyor, etc.) will cost you is €22,000.

Otherwise, you would be obliged to pay €22,000 + VAT, I think at 13.5% which would add up to €24,970.

The rules are more complicated than this, but that is the core of what your solicitor is asking.

http://www.revenue.ie/en/tax/vat/leaflets/property-guide/index.html

airman737

Thanks for the indept reply Victor, You made it very clear. Appreciate it.