Stamp Duty Changes 2007 Finance Bill

[Lorraine]

Does this mean what I think it means? in that separating couples selling their family home may now BOTH buy homes as first time buyers rather than one having to stay in the family home. Look forward to replies.

Extract from FINANCE BILL 2007 (Page 27) ... Section 99 amends section 92B of the Stamp Duties Consolidation Act 1999 which provides, inter alia, that a person whose marriage is the subject of a decree of divorce, judicial separation, nullity or a
deed of separation may be treated as a first-time purchaser once
and only once where the person buys another house to live in. The
conditions for this are that the person no longer retains an interest
in the former marital home and that at the time of the new purchase,
the spouse (or former spouse) of that person continues to occupy the
former marital home, which was occupied by both of them prior to
the decree or prior to the deed of separation being made.
This latter condition is being relaxed to provide that the spouse
(or former spouse), must occupy the former marital home, as his or
her only or main residence, following the granting of the decree or
the making of the deed of separation, but does not necessarily have
to still be occupying it at a time when the person, who originally
left the marital home, purchases a new home. However, first-time
purchaser relief will be denied to that person, where at the date of
the decree or at the date the deed of separation is made, the person
has an interest in another house/apartment apart from the former
marital home. Both changes being made apply to instruments
executed on or after 1 February 2007.

Thanks very much.
L

 

[efm]

Lorraine,

That is a very interesting find! - I had not seen that referenced anywhere else.

From my initial non-legal reading of it your interpretation seems correct. It seems that maybe the change was brought in to account for a situation where after a divorce or seperation one person rents for a while while the other stays in the family home. If some time later the person renting decides to buy BUT the spouse has sold the family home - in that case the person wasn't eligible for first time buyers relief.

Now, from my reading of it, after the new legislation there are two main situations where it can be beneficial 1. if after a decree of seperation or divorce, if both parties still hold an interest in the family home, and then subsequently sell it together, they are both entitled to FTB relief if purchasing again. 2. If one party is granted the family home as part of a seperation or divorce and sells it immediately the second person is still entitled to FTB relief.

Disclaimer - I am not a solicitor, and have no direct knowledge of family law; I do have a family member going through a seperation at the moment hence my interest.

 

[Thirsty]

Again with the disclaimer that I am not a legal professional, my reading of this would be different.

At present the following conditions must be met for one party to claim exemption from stamp duty (from http://www.citizensinformation.ie)

They are separated or divorced under a court order
This is the first property they have purchased since leaving the family home
The party purchasing has left the family home and retained no interest in it
The other party has remained in the family home.

This has led to an inequitable position in the past if the family home was sold prior to the purchase of another home. An example might help:

John & Mary separate and Mary relinquishes her interest in the Family Home and signs it over to John. Six months later John sells the family home. Mary then goes to buy a house, but finds she has lost her exemption from Stamp Duty because John has sold the family home - something she has no control over.

The new bill (from my reading) will relax that last condition so that John does not have to be in the family home at the time Mary buys a house.

If John sells the family home and buys another one, he does not have FTB status, but is assessed for stamp duty in the same way as anyone else.

 

[efm]

I've read it again, including the actual wording of the change, and I still reckon I might be right.

I agree with Kildrought's explanation as being 100% and it was to cover the exact scenario he described that the changes were made. But I think they have now left the door open for mine and Lorraine's scenarios to be possible as well (even if that may not have been the intention behind the change).

 

[Lorraine]

On re-reading and thinking about it again I think Kildought may well be right, the wording though convoluted may well only be rectifying a previous inequality. Although the same wording leaves the act open to 'abuse' in that in a couple with no animosity, one could sign the interest in the family home over to the other and then split the difference in the savings made on the stamp duty in becoming a first time buyer!!!!

However I imagine that the Revenue Commissioners will have the final say in the matter. Oh to be so cynical is sad, something to confuse those who call to the door in the canvessing months..................

Thanks for replys.

Lorraine.