Building a house - Stamp Duty & Co. Council issues

L

Long Fella

Guest
Hi all,

This is my first post so apologies in advance if I leave anything relevant out.

I am considering buying a site 7/8 miles outside Navan in a rural area. I am originally from this locality and my parents still live there. The intention is to build a house on the site subject to planning permission. However, I do not intend to live in the house for the next three years at the very least - if at all - as I work and live in Dublin now. So this is wholly an investment idea.

I only really started considering this last night so only a couple of things have occured to me.

1.
I will be exempt from Stamp Duty as it is my first time buying a property. However, I will not be able to rent the property as I will then incur a Stamp Duty liability from the Revenue - as they will claw it back because I'm renting it and not living there. Correct?

Or am I even charged Stamp Duty considering I am building the house - and not buying a finished product? So therefore could they claw it back? (Sorry, I am not up to speed with Stamp Duty).

2.
I believe County Councils have a "local needs" condition attached to all planning permission requests in such areas i.e. you need to be from the locality to be successful with a planning application. As I said, I am originally from this rural area and my family still live there so this hopefully will not be a problem. However, I believe that County Councils impose a condition on such applications that you cannot sell the property for 7 years. Is this correct? Does this mean I cannot sell the house full stop or does it mean I can sell it but won't get Principal Private Residence exemption from CGT?

In conclusion, if I cannot rent it and I cannot sell it for 7 years, making it highly illiquid, it wouldn't be much of an investment would it?

Could some of you highly informed individuals give me any advice on whether my assumptions are correct and, if they are, is there any way around them? Could you also let me know if there are any other issues I need to consider because, as I said, the idea is in the very early stages!!

I thank all of you in advance for any advice or ideas, they will be much appreciated. :)
 
1. At the moment there is no stamp duty relief (even for first time buyers) buying a site( from someone other than your parents). So depending on the price of the site you may well pay stamp duty. So there is no 'clawback' issue if you were to rent out the house.

2. Usually you will have to satisfy the council that you intend to reside in the house- it doesn't sound like you can at present. However if you do go ahead and obtain planning, often there is an occupancy clause stating that you have to occupy it for 5 to 7 years as your ppr. If you do try to sell, never having resided there, or having rented it out, the house is not compliant with planning permission and you will encounter difficulties in selling. If however, you were to reside in the house and then for genuine reasons, job change for eg, you had to move, you would usually be allowed to sell and the council would issue a letter of comfort in the circumstances which a new buyer could accept.

If you really intend to stay in Dublin, then yes, building a house with such an occupancy clause would not be advisable. Unless you can obtain planning without such a clause. See your local engineer for your chances.
 
Hi Vanilla,

Thanks for that - it was very helpful.

Just one thing - how do you mean consult your local engineer? Do you mean local county councillor or just the person I will be getting to build the house?
 
Building a house is a big undertaking. If you were doing it, you would need professional help with, amongst other things, your planning. Its a complex area and unless you undertake very significant research and put a lot of time into it, you'll find it hard to know how best to approach it. Someone who is involved in building work in the area ( architect, engineer, whatever) will be dealing with the Local Authority on a regular basis and will be aware of likely restrictions, approaches etc.,etc.

mf
 
Cheers MF, I'm confident I'll have all the necessary resources and thanks for clarfying the enginner issue.
 
Hi Long Fella,

As said already, Local Needs is going to be a big issue. You mentioned that you are originally from the area, your parents live there etc but your links to an area are only one part of the Local Needs requirements.

Planners will also look at your current situation as regards having somewhere to live. You didn't mention if you own a home in Dublin - but if you do, it's likely to be held against you. I know someone who was seeking planning in County Meath recently, next to their parent's house on family land but the fact that they owned a home in a nearby village in County Louth meant they were deemed as not having a housing need.

The other issue is that the vast majority of sites in county Meath come with an occupancy clause. I can't be sure but I'd imagine that all recent single-home planning approvals in Meath come with an occupancy clause. How stringently this is applied, I can't say...

I deal with sites from time to time and can't recall seeing a site for sale in County Meath recently that didn't have Local Needs or an occupancy clause.

If I can be of any help to you, send me a PM - I know a few agents in the area so might be able to get some info for you..
 
Just a quick question,

How would the council find out that someone already had a home in another area of the country. Is it only when some one places an objection saying that the applicant already has a house? Would be interesting to know how they would be able to find out this info!

Salmon
 
Was down at the planning office recently. two files that local need was being used as an excuse had letters from local employers. My friend has just submitted planning permission and the same deal (Letters from employers priest etc)
 
Hi Salmon,

For the person I spoke of, the way the council found out that he had a house locallly was because he mentioned this in the pre-planning meeting. He had took the view that it was best to be 100% honest..

Meathman99, letters like this are commonplace with applications. I have also seen cases where old school yearbooks showing Aunts and Uncles etc were dragged out as evidence of links with the local area.

Bottom line is, make sure you have your homework done before you go to a pre-planning meeting as quite often these are used as a mechanism for weedinig applicants out..
 
How would the council find out that someone already had a home in another area of the country. Is it only when some one places an objection saying that the applicant already has a house? Would be interesting to know how they would be able to find out this info!
Click to expand...

Planners can do a land registry search or they can ask you to submit a statement from revenue that you are not claiming mortgage interest relief on a property at the moment.

Peadar
 
Has anyone actually been refused permission because the LA found out off their own bat that you already had a house. I find it hard to believe that the overstretched LA in my area would go to those lengths to establish whether or not I had a house elsewhere.
 
Does LA mean Local Authority?

So they just take everyones word for it that they don't already have a second house?

A planner is assigned to each individual planning application and that planner has responsibility for researching all relevant data and coming to a decision. Relevant data includes whether or not applicant has a second house or not and also their relationship with the local area. These have to researched otherwise the planner is not doing his/her job.

Peadar
 
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