Key Post: Separatees can be treated as first time buyers

maybe it's well known - but I was surprised to find, buried in the site under CGT and Stamp duty that "Spouses who are separated or divorced are entitled to be treated as first-time buyers if they meet following conditions":

They are separated or divorced under a court order or by a separation agreement.

first property they have purchased since leaving the family home.

purchaser has left the family home and retains no interest in it.

the other party has remained in the family home.

This means they will pay zero or low rate Stamp duty.

Building Society and Revenue people don't seem to know this!
db.

Re: separation - FTB - Stamp Duty

And what I only recently found out.... the Finance Act 2001 extended the definition of f.t.b. to include persons separated under Separation Agreements ( this was a glaring anomaly - initially definition only covered persons with Court orders which might have had the effect of unnecessarily pushing people into Court to avail...) and backdated the entitlement to 15.6.2000
I have in the past week succeeded in getting a refund from the Revenue of an overpayment of duty by someone who had been separated since July 2000, bought August 2000 and paid owner occupier rate. Refund is over £2700.00 - anyone who thinks they might be covered should get on to their solicitors straight away.

MF

Re: how about an investmùent property

Does anyone know if a husband is still entitled to a FTB grant if he buys a house to live in after a separation/divorce but already owns an investment property which he keeps in the settlement?

Investment property

This is the wording from the Revenue SD1 2002 leaflet on duty.

IS THERE PROVISION FOR ANY SPECIAL SITUATIONS lN RELATION TO THE SCOPE OF THE DEFINITION OF A FIRST TIME BUYER?

Yes. There are two particular situations where a person is deemed to be a First Time Buyer.
(a) trustees....

(b) A spouse to a marriage the subject of a decree of judicial separation, a deed of separation, a decree of divorce or a decree of nullity in
the case of the first acquisition of a house by the spouse following the separation or divorce provided that the spouse had, in relation to the former marital home,
• left that home;
• not retained an interest in that home;
- whose separated former spouse continues to occupy that home which home was occupied by both spouses prior to the separation/dissolution of the marriage



mf

Examiner article

from Irish Examiner 25th Feb - (warning: the www.examiner.ie website is dog-slow or not responding in parts today). db

February 25, 2002
Changes in house buyer grants and stamp duty exemptions improves lot of divorced home seeker

By Conor Keane
UNHERALDED changes in first-time house buyer grants and stamp duty exemptions is making it easier for divorcees, especially men, to buy new homes and move out of the rented sector.
Changes in the law in June 2000 have remained an open secret since their introduction with hundreds of potential claimants ignorant of entitlements capable of providing savings of close to €10,000 for some divorced or separated house buyers.

However, it is possible to make backdated claims for houses purchased by people since June 15, 2000, who have had their divorce or separation court actions completed.

Sherry FitzGerald new house sales manager Mike O’Sullivan said auctioneers do not normally enquire or record the marital status of people buying new homes.

“This provision is welcome and as news of the availability of first time buyer status for divorcees becomes common knowledge it will help people to move out of flats and apartments into newly purchased homes.

“Most of those who will qualify for this provision will be men who have left the family home as a result of divorce or separation,” he predicted.
...... more estate agent drivel after here....

Re: Topic

Hi MF

My question is about stamp duty and I have edited it accordingly
A second hand house
Separatee
Yes - I think she meets the Revenue criteria.

I have read your quotation from the leaflet and as far as I can see there is no mention of limits

The purchase price is €319,000.

As a first time buyer, she would pay 4.5%
As a second time buyer she would pay 6%

1.5% of €319,000 is almost €5000 of a saving.

Brendan

Re: Topic

Yup, Brendan. Its a jolly good thing!

Just as a by the way, the jump in duty for ftb's once they hit EUR381001 (it goes from 4.5% to 7.5%) is a real bummer. Ive heard of a few sales falling down once the horror of going over EUR318001 hits home. I think ftb's struggle with the concept and impact of stamp duty.

mf

meeting the criteria

I meet all criera except : the other party has remained in the family home

We sold the home and split the proceeds

Do I still quailfy for reducd stamp duty for f.t.b?

thanks

Do I take it that this legislation does NOT cover a couple who were not married when they bought their property and have since seperated (one party bought out the other)?

Did they subsequently marry? In which case they may be entitled. Or are you saying that they were never married? In which case, no not entitled.

mf

No they were never married ........ so not entitled, that's what I thought thanks for the clarification.

But see this notice from Revenue where you may get ftb relief if you buy out anothers interest in a jointly owned property that both bought as ftbs.

What is the position where a person, who had obtained first time buyer relief on the joint purchase of a house with another first time buyer, subsequently acquires the other joint owners interest in the house?


A person who obtained first time buyer relief on the purchase of an interest in a house would not be precluded from obtaining first time buyer relief on a subsequent purchase of another interest in the same house provided that person has not purchased another house or part of another house in the intervening period.

mf

Ok so this is the scene:

My best friend bought a house last year with her then BF and split up with him without even moving in (both FTB's). BF bought out friends interest in the property - 15 mths later she now wants to buy a place with her current partner (he will be a FTB) will they both be classed as ftb's or just him and if just him how will that work ........

Sorry for all the questions - any/all advice appreciated!

They will be assessed collectively as second time buyers. If they are buying to live in, they will be classed as owner occupiers but not ftbs. If they are buying a new property they probably will not have a stamp duty liability as owner occupiers. They will have stamp duty if they buying an investment property.

If he buys on his own, he will be a ftb.

For more details, check Revenue for Form SD10A which gives all the
rates/classifications.

mf

Thanks for that will check out the Revenue site.

Can't see a response to this already, house sold, ex-Mrs the main beneficiary (90% of net sale price I think).
Ex-Mr bought a house in 2002 but didnt claim any relief from the stamp duty.
Is there a case for a refund?
Thanks in advance.
C

Not sure but I would definitely inquire with (a) solicitor (b) Revenue and/or (c) a tax advisor.

Very interesting thread from 20 years ago, which came up on google when I searched "separated" "first-time buyers". I never knew separated people were treated as first-time buyers 20 years ago. In January 2022, the government said it was going to treat separated/divorced people as first-time buyers. Regarding separated/divorced people, what was different in the 2022 announcement compared to the 2002 legislation? [https://www.independent.ie/business...ed-couples-as-first-time-buyers-41387049.html]

Crucially, however, despite this January 2022 announcement Revenue will not treat separated/divorced people who have no property as first-time buyers for tax purposes if they previously owned a family home. Therefore, separated/divorced people cannot access the Help to Buy/HTB scheme, which is quite a significant loss. Is MF's post above implying that back in 2002 Revenue deemed separated people to be first-time buyers?