Stamp Duty

Treade

I am a first time buyer trying to purchase a small house in Dublin. I am currently bidding upto €317,500 but am constantly getting pipped by people bidding €320,000-€325,000. I could afford to pay this myself but for the fact that the stamp duty kicks in and adds another €10000 to the price. Is there any way to legally avoid paying the stamp duty on a house costing say €325K. Is it possible to pay €317500 for the house and then spend €7500 separately buying the garden shed and on the fixtures and fitting within the house? Any advice would be greatly appreciated!

HOB-it

Hi Treade

The question I have to ask is - do you have your heart set on this house? Because - to avoid (or significantly reduce) your stamp duty exposure - it would be worth your while to consider a new house rather than a 2nd hand one.

unklerosco

My friend just bought a house that was €320,000.. Shey paid €3000 in cash to the seller n they wrote the house off as selling for €317000 n skipped stamp duty so id say its possible. As ur solicitor to check with the seller to see if they'd go for it..

Sleipnir

It certainly would HOB-it
Your first is the one you need. Your second is the one you want.

OP: You could certainly try and I have come across one or two sales that went that way, but you'll find most sellers unwilling to do it and estate agents even less so.

HOB-it

you'd want to be careful in this situation. the revenue may look at it as deliberatley trying to avoid Stamp Duty (if they find out of course) and hit you with the full whack anyways. But if a solicitor recommends it then it must be legal. I know from dealings with the revenue they look at the substance of a transaction rather than its form.

grumpytrousers

Treade wrote:

I am a first time buyer trying to purchase a small house in Dublin. I am currently bidding upto €317,500 but am constantly getting pipped by people bidding €320,000-€325,000. I could afford to pay this myself but for the fact that the stamp duty kicks in and adds another €10000 to the price. Is there any way to legally avoid paying the stamp duty on a house costing say €325K. Is it possible to pay €317500 for the house and then spend €7500 separately buying the garden shed and on the fixtures and fitting within the house? Any advice would be greatly appreciated!

You can, I think, do something like that - effectively what happens then is that the amount that stamp duty has to be paid on is less. Beware, the way that this is done is that your solicitor and the solicitor for the other side will have to agree in the deed of transfer that the *ahem* price being paid is not exactly what is being paid, if you know what i mean. This document which you and the vendor will sell is then sent to the Revenue who stamp it.

What I'm trying to get at is that you'll have to talk both your solicitor and the other side into preparing a document which will be stamped by the Revenue and which may not be exactly 100% kosher. You may well get away with it. They will ride you silly if you don't.

Talk to your solicitor about this one, and best of luck

Treade

All the house in the area are coming on the market at €300K-€310K but they are selling for €320K-€325K. Basically the non 1st time buyers are are just going over the threshold to deter the hard pressed first time buyer. It just doesn't seem very fair

mathie

Treade wrote:

All the house in the area are coming on the market at €300K-€310K but they are selling for €320K-€325K. Basically the non 1st time buyers are are just going over the threshold to deter the hard pressed first time buyer. It just doesn't seem very fair

(Morpheus)
Welcome to the real world.
(/Morpheus)

lomb

Treade wrote:

It just doesn't seem very fair

lol, as the man say welcome to life , what u want to do is buy the furnishings seperately for 3 or 4 k, afaik the fixtures cannot be sold seperately only the non attached things to the property if u know what i mean, its very dodgy though in my opinion unless its only 3 grand and u can ask the estate agent that ul pay 317 for the house and fittings and another 3 for the sofas etc , they have to put the offer thru to the vendor, what u want to do is put the offer in immediately u c it go on sale and tell the estate agent ur offer is only good for one week and give them a copy of ur mortgage approval, otherwise u will get outbid if the houses are in demand.put in a very good offer and tell them off the bat 317 for the house and 3 for the furnishings and that should def b ok. if the vendor has sense theyl go with that

here is uk info http://www.findaproperty.com/story.aspx?storyid=5300

MorningStar

Treade wrote:

All the house in the area are coming on the market at €300K-€310K but they are selling for €320K-€325K. Basically the non 1st time buyers are are just going over the threshold to deter the hard pressed first time buyer. It just doesn't seem very fair

You do realise they have to pay more stamp duty too? The threshold adds a big lump of money onto them too. I also don't think it is to deter first time buyers I think first time buyers can't afford them. Non first time buyers might be selling there last house paying estate agent fees and then paying more stamp duty than you, they might not see that as fair. Or they could be divorced and need to start fresh on their own. Nothing is fair to all in the world.
Lomb is right though. I did the same with our first house. Paid £2k for a sofa that I had to pay €50 to get rid of. Didn't like the house that much and was able to upgrade later which is really the hard bit you have to do. It's possible you will stay in the house but it seems to be normal to have to get the house you want in stages these days. Buying a house as close as possible to your ideal for a price you can afford is the only way to go. At least that way it might become the ideal as time goes on.