Property Price Register - ridiculously cheap?

Pauley2

I just noticed some prices on the price register that are ridiculously cheap. i.e. 40k for houses that are easily worth 400k or 500k

None were identified as "not full market price" yet they are each in the same group of 5 - i.e. all part of the same sale. So they don't appear to be your "normal" below market transfers within say, a family.

By the looks of this it looks like 5 houses were sold in Prime Dublin areas for a grand total of 200k. I estimate conservatively that they should have been worth at least 2 mil.

So according to the PPR, it looks like these sold at a 10x discount.

What could possibly for that? - NAMA?, a PPR error?

Where can I find a deal like that?!!

StupidLikeAFox

If its a new build the price quoted is exclusive of VAT of 13.5%

Not sure about the really cheap ones though, maybe they were derect and needed complete renovation?

blackeyedpeat

I know that a house close to me is on the PPR for about a third of the market value at the time of sale. It was an inheritance sale where one of the children "bought it". It is also significantly lower than any other sales in the area even during the recession years

riclad

You can sell your house to a relative for 50k, even if its worth 100k.
A house in ballsbridge sold for 80k, in 2016, cos it was a fixer upper,
it needed major repairs .

blackeyedpeat

riclad wrote: »

You can sell your house to a relative for 50k, even if its worth 100k.
A house in ballsbridge sold for 80k, in 2016, cos it was a fixer upper,
it needed major repairs .

I agree and this is what has happened in my area, in order to limit inheritance tax. I know the family, the circumstances and what the condition of the house was so I can understand why it appeared to be so cheap.
However a stranger checking the PPR might wonder why is there currently a house for sale at six times the value of a house sold in 2012.

riclad

And a stranger can look on daft.ie and see all the houses in this area are worth 140k plus,
so he,ll still pay 130k plus for the house anyway.
Most people buying a house look on daft.ie or myhome.ie .
if someone sells a house for 40k to their daughter ,so what,
its perfectly legal.
And theres no houses for sale on the register ,
most people dont use it at all .

Pauley2

I know that you can sell under value, e.g. between family members etc for whatever you want., but in those cases the PPR usually flags those sales as such - both in the list view (with 2 asterisks **) and in the detail view where there is a "Not Full Market Price" field.

But with the houses I saw listed, neither of those "flags" were selected AND the houses were listed in a sale with 4 other properties. It's still a bit if a mystery to me... On the surface it looks like all for sold for 200k. Even if they were derelict that would still be an amazing bargain given the locations.. Odd...

m'lady

I was also told by my solicitor that prices that are particularly low on the ppr can be when a relationship/marriage breaks down (there's a joint mortgage involved) and one party buys out the other.. unsure how true that is.

Another factor could be the fraudulent practice of paying a certain percentage 'under the table' to a builder. We were approached twice to do this, and was told by the estate agent who was prepared to facilitate this (I'm sure they were getting something for their trouble!) that obviously the price would show low on the ppr.

cerastes

Have seen houses marked as sold but with the double asterisk for as low as 10000, I'd assumed it was some Nama sale as there was about 10 in the estate which seemed complete and this was done a number of years ago at this stage, I thought it'd be nice to be able to pick one up for that price but I'm sure it was all or nothing, even still, the total cost didn't amount to the value of one house now or even then I'd wager. My conclusion was they were never available to someone like me, even if I had the money for the lot.

Muahahaha

Pauley2 wrote: »

I know that you can sell under value, e.g. between family members etc for whatever you want., but in those cases the PPR usually flags those sales as such - both in the list view (with 2 asterisks **) and in the detail view where there is a "Not Full Market Price" field.

But with the houses I saw listed, neither of those "flags" were selected AND the houses were listed in a sale with 4 other properties. It's still a bit if a mystery to me... On the surface it looks like all for sold for 200k. Even if they were derelict that would still be an amazing bargain given the locations.. Odd...

This is just a guess but maybe the reason why there is no asteriks flagging a below market value sale is because they are trying to defraud Revenue. As said before there property transfers between family relations for under market value are possible but they must be declared to Revenue, who then calculate the tax payable. Presumably Revenue then tell the Property Price Register and they then put the asterik "not at full market price" on the listing.

A house bought for €15k in the 60s might be worth €400k now and would have a fair whack of capital gains tax owing. So family memers may agree to do a under market value deal in order to avoid such a big capital gains tax liability.

davo10

Marking the purchase/inheritance price down to avoid tax rebounds on you when you sell the property unless it is your primary residence. You pay CGT on any profit made when the house is sold.

Lumen

Muahahaha wrote: »

This is just a guess but maybe the reason why there is no asteriks flagging a below market value sale is because they are trying to defraud Revenue. As said before there property transfers between family relations for under market value are possible but they must be declared to Revenue, who then calculate the tax payable. Presumably Revenue then tell the Property Price Register and they then put the asterisk "not at full market price" on the listing.

A house bought for €15k in the 60s might be worth €400k now and would have a fair whack of capital gains tax owing. So family members may agree to do a under market value deal in order to avoid such a big capital gains tax liability.

CGT is only payable if it's not a PPR, but there are several other forms of tax that might be evaded: CAT and stamp duty. This would be a particularly stupid form of tax evasion since (a) it would require connivance from a solicitor who submits the stamp duty return, and (b) it's trivial for Revenue to discover with some very basic data mining.

Why would the solicitor risk it? Maybe they could claim ignorance of house prices. :pac:

m'lady wrote: »

I was also told by my solicitor that prices that are particularly low on the ppr can be when a relationship/marriage breaks down (there's a joint mortgage involved) and one party buys out the other.. unsure how true that is.

In the case of transfers arising from divorce or civil separation, there is exemption from CAT, CGT, and stamp duty

http://www.citizensinformation.ie/en/money_and_tax/tax/capital_taxes/capital_taxes_following_separation_or_divorce.html
http://www.citizensinformation.ie/en/housing/owning_a_home/buying_a_home/stamp_duty.html

But if there's no tax to be evaded, what's the point in marking the price down?

Maybe it's something to do with structuring transfers between companies to avoid tax.

Or it could just be a data entry error.