Stamp Duty 1% or 6%?

olearyj1

Mods feel free to move to more relevant section if need be.

Currently in the process of purchasing a site with planning permission. Once constructed this will be our primary residence. Can anyone please clarify the correct rate of stamp duty applicable, 1% or 6%?

looksee

As I understand it, a building with one acre pays 1%, over 1 acre is 6%. That is my current experience but there may be further complications to it.

kieran.

1 or 2% on residential 6% on commercial

https://www.revenue.ie/en/property/stamp-duty/current-rates-of-stamp-duty/residential-and-non-residential-land-and-buildings.aspx

froshtyv

You will pay 6% stamp duty on it.

I paid 6% towards the end of the last year for a 0.5 acre site with full PP.

I have read that there is a claim back scenario once the house is built but it is no where near what you paid.

It is based on the % of what the final area of the house covers compared to the total site.

looksee

Not sure how you came to pay 6%, the regs that Keiran provided show clearly

Residential First €1 million 1%

So a half acre site should not have been anyway near 6%. Over €1m is 2% and commercial is 6%.

If you purchase a site over 1 acre for mixed use in theory you can pay 1% on a 'house and 1 acre' and 6% on the remainder. This depends on a number of issues however, whether there is a house on the site, its age and dereliction, and the willingness of the vendor to co-operate.

olearyj1

Thanks for input / comment to date.

I had read the comment on the revenue website and I understood that 1% would have been applicable. I have queried with my solicitor and he has confirmed that 6% is applied as per Froshtyv comment. Meeting him next week and will look for further clarification.

I would assume it's a case of the Revenue protecting themselves from missing out on income i.e. when the dwelling is completed the overall value is let's say 350k (at 1% is 3,500). Let's say site value is 75k (at 6% is 4,500). I assume the difference is what Forshtyv say's you can claim back.

looksee

I am still not seeing how 6% applies for a residential site. The most you can pay on residential is 2%. Farmland is 6% but if you have planning permission to build a house then up to 1 acre is residential, if you are buying it for any other purpose it is commercial.

sarah88

I was also told by two solicitors that stamp duty will be charged at 6% on a half acre site I plan to build on. I was told that the "commercial rate" is automatically applied, even tho I will be living in the house.

dubrov

looksee wrote: »

I am still not seeing how 6% applies for a residential site. The most you can pay on residential is 2%. Farmland is 6% but if you have planning permission to build a house then up to 1 acre is residential, if you are buying it for any other purpose it is commercial.

Site purchase is always classified as a commercial transaction so 6% applies to the site purchase price (not the whole build cost).

There is also a stamp duty refund scheme which means you can claim back up to 2/3rds of the stamp paid if you build a residential building on the site within a few years. The "up to" bit is unclear as the actual Finance bill is ridiculously difficult to understand.

This author of this article seems to think it will only be possible to reclaim a very small percentage but I wouldn't be is sure it is correct.

https://selfbuild.ie/news/self-builders-unlikely-get-full-stamp-duty-refunds/

olearyj1

Seems the Citizen Information page hasn't kept pace with recent budget changes as they define “Residential property” includes houses, apartments and any site that is bought with a connected agreement to build residential property on it.

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

dubrov

olearyj1 wrote: »

Seems the Citizen Information page hasn't kept pace with recent budget changes as they define “Residential property” includes houses, apartments and any site that is bought with a connected agreement to build residential property on it.

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

That part did not chanee in Budget 2018 as it does not apply to the purchase of a site for a self build.
It means that if you buy a new house from a builder which hasn't started building on it, the residential rate applies. The stamp is then charged on the whole value (site plus build cost).

The key bit is "connected agreement". Basically to pay the residential rate you need to sign a contract to buy the site that is tied to the purchase of a house to be built on it.

olearyj1

dubrov wrote: »

That part did not chanee in Budget 2018 as it does not apply to the purchase of a site for a self build.
It means that if you buy a new house from a builder which hasn't started building on it, the residential rate applies. The stamp is then charged on the whole value (site plus build cost).

The key bit is "connected agreement". Basically to pay the residential rate you need to sign a contract to buy the site that is tied to the purchase of a house to be built on it.

Thanks for clarifying dubrov, makes sense now that I have looked at it again.