Stamp duty new home

levitronix

Im having a bit of bother with a solicitor right now about stamp duty

Revenue states that on a new build house , stamp duty is calculated [font=Arial, Tahoma, Verdana, Helvetica, sans-serif]assessed on the VAT exclusive consideration.[/font]  

So thats 1% of the price minus the vat of 13.5%

227000 house price new build
vat 13.5% 
227000 - 27000
200000
stamp duty due 
2000 euro 

they still insist its 1% of the price agreed

srsly78

227000 is 113.5%. Stamp is paid on 100%. Redo your maths.

Homer

http://www.citizensinformation.ie/en/housing/owning_a_home/buying_a_home/stamp_duty.html#l62fd2

It's all there but not sure if that's absolutely up to date?

levitronix

thats not up to date , thx anyway, Revenue will always be 100% up to date, id hope
I just feel this another example of rip off Ireland, and i wonder how many people got dupped

dudara

Moved to Accommodation & Property

dudara

irlrobins

If €227,000 is the price incl VAT, then €200,000 is the ex VAT price. The stamp duty is calculated as 1% of the ex VAT price, so would be €2,000.

Prismatic

My solicitor tried it with me too. Seems to be a scam that a lot of them do. Entirely intentional, absolutely no way they do not know this rule.

See previous thread:

http://touch.boards.ie/thread/2057654911/1/#post101878147

Victor

Ask for a discounted fee, seeings as they seem to be under-qualified for their job and you can't be sure they've not made other mistakes.

68 lost souls

I only saw yesterday on here that Stamp is ex-vat, mad eme happy to hear as I did not know this. Should save me circa €500

bbari

is 1% of the ex vat applicable to the new build only or it also applies to old houses ?

Victor

bbari wrote: »

is 1% of the ex vat applicable to the new build only or it also applies to old houses ?

Old houses tend not to attract VAT, unless materially improved, e.g. you took a ramshackle tigín and turned it into a large modern house. So, with most secondhand house sales, the stamp duty will normally apply to the full price. Furniture, etc. can be sold separately and as a 'depreciating chattel' wouldn't normally attract stamp duty or other taxes.

In the context of property, VAT primarily applies to 'improved' property, e.g. a building was built; housing sites were serviced with roads, water, power, etc.; or a bog was turned into arable land, etc. Where there is an existing building that was extended, the situation would need to be examined carefully.

Stamp duty will normally apply to all property transactions, including certain leases.

Seek professional advice.

bbari

Thanks

If someone have paid the stamp duty on the gross amount of new build, how can one go by to get it back ?

juke

bbari wrote: »

is 1% of the ex vat applicable to the new build only or it also applies to old houses ?

New, and afaik, only if the contract/building agreement actually specifies that the price includes VAT.

This from historic memory - before stamp duty returns were done through ROS, Revenue insisted on seeing the contract with the VAT clause before allowing only the ex vat duty be paid. Some contracts didn't so stamp duty had to be paid on the whole purchase price.

Prismatic

bbari wrote: »

Thanks

If someone have paid the stamp duty on the gross amount of new build, how can one go by to get it back ?

Ask your solicitor to give you your money back.

juke

Prismatic wrote: »

Ask your solicitor to give you your money back.

Yeah - if too much has been paid, you solicitor can file an amended return and Revenue will refund the difference.

Thoie

Thanks for the heads up, will watch out for that one!

bbari

After reading on this thread, I queried the stamp duty with solicitors two months ago as they have charged 1% of the gross amount. She replied after two months and said that the land value of the property isn't vat applicable and its only the construction costs are vat applicable hence the vat refund will be worked out accordingly. Is she right or wrong again?

According to my understand you divide the total paid amount by 13.5% to get the net amount and work out the stamp duty from that. I didn't see the land value part mentioned anywhere.

The_Conductor

bbari wrote: »

After reading on this thread, I queried the stamp duty with solicitors two months ago as they have charged 1% of the gross amount. She replied after two months and said that the land value of the property isn't vat applicable and its only the construction costs are vat applicable hence the vat refund will be worked out accordingly. Is she right or wrong again?

According to my understand you divide the total paid amount by 13.5% to get the net amount and work out the stamp duty from that. I didn't see the land value part mentioned anywhere.

Just who buys the land underneath a property separately?
Get proper advice- but this sounds like the biggest crock I've heard in quite some time.

juke

bbari wrote: »

After reading on this thread, I queried the stamp duty with solicitors two months ago as they have charged 1% of the gross amount. She replied after two months and said that the land value of the property isn't vat applicable and its only the construction costs are vat applicable hence the vat refund will be worked out accordingly. Is she right or wrong again?

According to my understand you divide the total paid amount by 13.5% to get the net amount and work out the stamp duty from that. I didn't see the land value part mentioned anywhere.

She might be right - depends on the wording of your contract with the developer.

bbari

The_Conductor wrote:

Just who buys the land underneath a property separately? Get proper advice- but this sounds like the biggest crock I've heard in quite some time.

Likewise.... The annoying part is that you pay solicitors "The Professional Fee" to act on your behalf and then you have to tell them that they overpaid.

Revenue, Daft and citizen information websites have explained the calculations with examples and its pretty simple the way i see it.

bbari

juke wrote:

She might be right - depends on the wording of your contract with the developer.

I guess the developer would have worded the contracts the same way for all the houses. Checked with few neighbours and the vat on the land element isn't mentioned.

PhoenixParker

The_Conductor wrote: »

Just who buys the land underneath a property separately?
Get proper advice- but this sounds like the biggest crock I've heard in quite some time.

Many new build contracts are set up that way as you're signing the contract before the house is built. It's two contracts together, one to buy the land and the second contracting the builder to build the house.

juke

The_Conductor wrote: »

Just who buys the land underneath a property separately?
Get proper advice- but this sounds like the biggest crock I've heard in quite some time.

bbari wrote: »

Likewise.... The annoying part is that you pay solicitors "The Professional Fee" to act on your behalf and then you have to tell them that they overpaid.

Revenue, Daft and citizen information websites have explained the calculations with examples and its pretty simple the way i see it.

This is how new houses are sold. You are buying a site and agreeing with the developer that they will build a house on the site in accordance with the plans and specs.

Developers sell new properties in 2 ways usually:

1. Combined contract to buy the site/building agreement to build the house - usually this is one price, and usually all vat inclusive;
or
2. Separate contract to buy the site and a building agreement to build the house. This was the norm 10 years ago. The price is split. With these, the building agreement usually is a vat inclusive price. The contract for the site - that depends on each contract.

bbari

Even though when i bought the house it was almost ready, they might have two separate contracts and probably that's where the solicitor is coming from.

Marcusm

The_Conductor wrote: »

Just who buys the land underneath a property separately?
Get proper advice- but this sounds like the biggest crock I've heard in quite some time.

Most people who bought an unbuilt new build prior to the crash will have entered into separate contracts for the transfer of the land and construction of the house for the purpose of minimising stamp duty. In most cases the purchaser will not have realised this as they don't read the documents.

Victor

I thought that this was now illegal?

Thoie

Victor wrote: »

I thought that this was now illegal?

I'm in the process of purchasing like that at the moment, and while my solicitor has raised a huge number of questions about the contract, that hasn't been blinked at, so I suspect it's not. It's a complete PITA though.

Marcusm

Victor wrote: »

I thought that this was now illegal?

I think you are confusing illegality with no longer giving the same reduced stamp benefit. If a developer has a piece of land and plans to build 20 houses on I, he effectively has to follow a sale of land and construction contract route in order to get a sale on the hook (esp if he wants to raise development finance against it). While g could no doubt have a conditional sale with a CP that a house to a particular spec be built in it, he would be investing a lot in additional legal fees as compared to following the tried and tested documentation format.