Are some property investors being charged too much stamp duty?

[Brendan Burgess]

An accountant has set up a website called www.stampdutyblunders.com where he claims that many people who bought new properties to let paid too much stamp duty.

I can't find an explanation for this systematic overcharging. Was it due to the blunders of their solicitors or was there a rule change?

 

[mf1]

Is that not a very old creaky website?

Most of the info seems to relate to 2004 and the extract from Brian McDonald is really badly written. e.g.
"the Irish Independent understands the overpayments arose from erroneous calculations of the amount of stamp duty payable on the purchase of new homes, almost all investment proprieties."

There is also a clear innuendo ( unsubstantiated) that solicitors were pocketing any refund.


The point about stamp duty on new houses for investors is that Stamp Duty has always been paid on the ex-vat value of the entire consideration. VAT would normally be applicable on the Building Agreement only not on the site value. The only instances I can think of where this would occur would be where the solicitor failed to grasp the concept ( but even then Revenue would normally pick up) or, in some cases, where the Building Agreement and Contract for sale were combined and no allowance was made for VAT.


mf

 

[MOB]

I doubt that there is any significant problem with solicitors failing to strip out VAT for stamp duty purposes. Even if there is ( which would greatly surprise me), any suggestion that there is some sort of systemic problem with solicitors 'pocketing the difference' is certainly absolute bunk. (The amount paid is stamped right there on the deed - a solicitor who wanted to be a fraudster would certainly come up with something better than this.)

There is a minor issue which may well have resulted in overcharging of VAT in a small way; Over the years I have consistently had to correct\dispute with Revenue over the way that they calculated the VAT-exclusive price for Stamp Duty purposes. The calculation method used by at least some in Revenue was:

1. Take total price
2. Deduct Site price ( where there is a separate site contract and building agreement)
3. Deduct VAT from balance
4. Add back site price

This method had as its basis the clearly erroneous assumption that there was no VAT on the site price. The difference in Stamp Duty would be relatively modest, but I am sure there are practitioners who would - when the 'extra' payment was demanded by the Revenue Commissioners- simply stump up payment on the basis that the Revenue Commissioners could hardly be wrong. This is, as I say, a relatively minor issue - (though still worth a few hundred on some transactions) and in fairness I have not noticed the problem in the past 2-3 years ( though it occurred repeatedly for me over the previous decade - maybe one in four investor purchases).

 

[delgirl]

Is that not a very old creaky website?

Stampdutyblunders.com were advertising on East Coast FM last week.