Buying out Partner - Stamp Duty issue

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tml

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Hi,

Apologies in advance if this post is a bit long winded!! Friend of mine has split up with his fiance and is buying out her share of their property and is worried about what stamp duty he will have to pay.

Basically they bought the house for 360k 2 years ago, he put in 150k cash which worked out at just over 40% of the value of the house and they took out a mortgage for the balance, so effectively they owned the house 70:30. A legal agreement was put in place acknowledging the fact that he put in this 150k and should they ever split up and sell the house that he would get this 150k back.

The house has now been valued at 560k, their existing mortgage is 240k. He has agreed to pay her 91k for her share and the house will be transferred into his sole name. His solicitor has told him that he will have to pay 14k stamp duty ( 5% on half the value of the house)

However my friend is arguing that he should only have to pay 5k stamp duty as his ex-fiance only ever held a 30% share in the property ( 560,000 x 30% = 168,000 x 3% stamp duty = 5040)

Has anyone ever come across this situation before, how does he go about proving his case to the Revenue?
 
She will have to pay full Stamp duty next time whe buys anywhere though

was he (actually both of them) a FTB when he bought this place or not ???
 
He was a second time buyer and she was a first time buyer when they first bought the house, she is now buying a new property so stamp duty is not an issue for her.
 
check the revenue site, he probably has to pay at the STB rate . were they married already the departing party gets FTB status again but they are only engaged.
 
This may be totally irrelevant but if he was not a FTB then surely stamp duty was paid in the first place. How can they charge it again? From what's been said, it seems that if married she can walk away and regain FTB status, while he remains and gets to pay stamp duty all over again! Unless it was a new place and under 1250 sq.ft? It would seem fair that he pay stamp duty on 30% if he has to pay it at all. Can anyone explain this situation?
 
If there is a written agreement in place stating that they own the property 70/30 then this should be submitted to the revenue when stamp duty is being paid, Stamp duty is paid on the value of the asset passing, it the property is owned 70/30 then he should pay stamp duty on 30% of the value only. The revenue should accept the written agreement as evidence of the split.
 
yes when they first bought the house, they paid 21k stamp duty so he is understandably upset at the prospect of paying another 14k on the same house. but hopefully the revenue will accept the written agreement as evidence that he owns 70%
 
He is not paying stamp duty twice if I understand your correctly.

He bought 70% of a house and paid stamp duty on it. She bought 30% of a house and she paid stamp duty on it.

He is now buying the remaining 30% and, so of course, he should pay stamp duty on it.

Brendan
 
Brendan said:
He is not paying stamp duty twice if I understand your correctly.

He bought 70% of a house and paid stamp duty on it. She bought 30% of a house and she paid stamp duty on it.

He is now buying the remaining 30% and, so of course, he should pay stamp duty on it.

Brendan
Click to expand...

The point is that he's being charged stamp duty on 50% of it not 30%!
 
Hi,

I have been in a similar situation - myself and ex-partner bought a second hand house both as first time buyers. We paid stamp duty on it. I bought him out in April - and after everything was signed and sealed my Solicitor presented a case to revenue. I was told that as there was not much equity there she was 99% sure I would not have to pay stamp duty - In the end no stamp duty was paid. The solicitor handing the case should be able to advise the situation - I think if stamp duty is to be paid it may be on the increase in value of the house €200k. HTH.
 
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