Stamp duty on house buyout

killasser

I am buying out my ex-wife's share of our family home; this is not court-ordered. She no longer lives in Ireland and I still live in the house. I received the final papers today which noted that I would have to pay stamp duty as I am essentially purchasing 50% of the house from her.

This seems strange to me, I already paid stamp duty when I purchased the house and now I have to pay it again.

Anyone have any insight into this? is this normal? should I seek legal advice from another solicitor?

Peregrinus

This is normal. Your ex-wife is selling a half-share in the house to you. This is a dutiable transaction.

EAch sale-and-puyrchase of the property attracts duty - the more it it sold, the more occasions on which duty is chargeable. The stamp duty paid last time round was paid on the transfer of the house from [Vendor] to you and your wife jointly. We now have a new transfer of a 50% share from your ex-wife to you. When, in the future, you sell the house to someone else that will be a third transaction, attracting a third slug of stamp duty (payable on that occasion by the purchaser).

CIARAN_BOYLE

killasser wrote: »

I am buying out my ex-wife's share of our family home; this is not court-ordered. She no longer lives in Ireland and I still live in the house. I received the final papers today which noted that I would have to pay stamp duty as I am essentially purchasing 50% of the house from her.

This seems strange to me, I already paid stamp duty when I purchased the house and now I have to pay it again.

Anyone have any insight into this? is this normal? should I seek legal advice from another solicitor?

In an amicable split you tend to agree and execute these details before the marriage end. Spouses including separated but not divorced spouses are given an exemption here.

If you are divorced and you used a solicitor I would have words with the solicitor you used about why they didn't recommend tidying up these details before the divorce.

Yyhhuuu

GeneralComment It is not normal or usual for stamp duty to be paid in a transaction such as a Deed of Conveyance/Assignment between spouses/ civil partners; It's usually exempt. It would be exempt if, for instance, a property adjustment order in a Divorce.

Peregrinus

Yyhhuuu wrote: »

It is not normal for stamp duty to be paid between spouses/ civil partners. It's usually exempt. It would be exempt if a property adjustment order in a Divorce.

Yes, but in this case they're not spouses or civil partners. They used to be, but that's not enough to get a stamp duty exemption where the property transaction takes place after the divorce, and is not an aspect of the court-ordered property adjustment.

In short, if they had done this while there were married or as they were divorcing, there would be no stamp duty. But transaction that you only enter into after the divorce are dutiable in the normal way.

Yyhhuuu

Peregrinus wrote: »

Yes, but in this case they're not spouses or civil partners. They used to be, but that's not enough to get a stamp duty exemption where the property transaction takes place after the divorce, and is not an aspect of the court-ordered property adjustment.

In short, if they had done this while there were married or as they were divorcing, there would be no stamp duty. But transaction that you only enter into after the divorce are dutiable in the normal way.

Yes I was aware of this. Can I ask are you a Solicitor or Barrister or have you a degree in Law as you seem to have vast knowledge?

Peregrinus

It's not that vast! But, yeah, I'm a solicitor, though I no longer practice in Ireland (and haven't for some years).

ShatterResistant

Presumably the stamp duty will be due only on the 50% share being purchased, rather than the full property value again?

killasser

Apparently not, I have been informed by my solicitor that I will pay stamp duty on a recent valuation of the house. So, .05% (half of 1%) of the full valuation not on how much I paid my ex-wife.

ShatterResistant wrote: »

Presumably the stamp duty will be due only on the 50% share being purchased, rather than the full property value again?

wench

killasser wrote: »

Apparently not, I have been informed by my solicitor that I will pay stamp duty on a recent valuation of the house. So, .05% (half of 1%) of the full valuation not on how much I paid my ex-wife.

Half a percent of the full value is the same amount as one percent of half the value.
Eg for a house worth 300,000, it will be 1500 either way

killasser

wench wrote: »

Half a percent of the full value is the same amount as one percent of half the value.
Eg for a house worth 300,000, it will be 1500 either way

Correct. But I was replying to "50% share being purchased, rather than the full property value" which is not the same. I will not be paying my ex, 50% of the property value. If house is 300,000 and I am paying my ex, 75,000 then the stamp duty will be different on both of those amounts.

Peregrinus

You will pay stamp duty at the normal rate on the value of the share that is transferred to you. If the house is worth 300,000 and you are aquiring a 50% interest that belongs to your ex-wife, the value of the 50% interest is 150,000. The rate of stamp duty on residential property worth less than a million is 1%. 1% of 150,000 is 1,500. That is the amount of duty that will be payable.

The amount (if any) that you pay to your wife in this transaction is irrelevant. Stamp duty is payable on the value of the property transferred to you, not on the amount you pay for it. In a simple arm's-length transaction in the market, the two figures are of course the same (why would you pay more than 150,000 for a property worth 150,000? Why would the seller accept less?) but if the transaction is not at arm's length, or if it is compounded with other transactions, then disregard the payments made; just focus on the value of the property interest transferred.