Clawback of stamp duty

J

jamesgm

Registered User
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I currently live in a 3 bed semi which I bought 2 years ago for E195K . I was not a first time buyer but I did not pay stamp duty as it was a newly built house under 125sq meters and I was buying as an owner occupier.

I am now planning to buy another newly built house for E310K which is 130sq meters. The plan is to move out of the other house and into this house as owner occupier.

Two Questions:-
1. Am I correct in saying I will not have to pay any stamp duty on this new purchase as I will be an owner occupier and the value is only E310K which puts it under the Chargeable Consideration threshold?

2. If I keep the first house and rent it out will I pay a stamp duty clawback & how much will it be?
 
Re: Clawback on Stamp Duty

1. Not Necessarily, it depends on the value of the site element of the purchase price.
2. The Stamp duty is payable on the date the property is first rented and it is calculated at the applicable rate on the entire purchase price less VAT (13.5)
 
Re: Clawback on Stamp Duty

jamesgm said:
Two Questions:-
1. Am I correct in saying I will not have to pay any stamp duty on this new purchase as I will be an owner occupier and the value is only E310K which puts it under the Chargeable Consideration threshold?
Click to expand...

No, this is not correct.

From the Revenue site:

New houses or apartments which are purchased by an owner occupier (including a first time buyer) where the total floor area exceeds 125 square metres are charged with duty, at the appropriate residential property rate as per the table above (as you are not a FTB it will be 5%), on the site value (excluding VAT) or one quarter of the total value of the house including the site (excluding VAT), whichever is the greater, subject to clawback.The size of the floor area must be certified by a qualified architect, engineer or surveyor

jamesgm said:
2. If I keep the first house and rent it out will I pay a stamp duty clawback & how much will it be?
Click to expand...

Yes-payable at 4%.
 
Re: Clawback on Stamp Duty

Hi CCOVICH/liteweight,

I actually agree with ramble but I have to question your advice on both questions:-

1)
I am taking the following from the Revenue website under the heading Stamp duty on new houses and apartments
If the area of the house or flat is greater than 125 sq. metres (1,346 sq. feet), some stamp duty is payable if the Chargeable Consideration is above the relevant exemption threshold. (The stamp duty is assessed on either the cost of the site or 25% of the cost of the site plus the building costs (less VAT), whichever is the greater figure. This figure is called the Chargeable Consideration.

The exemption threshold is E127K so at 25% of E310K(less VAT) I calculate my stamp duty as owner occupier will be assesed on ~E77.5K therefore I am exempt.

2)
Stamp duty is calculate on the figure less VAT so E195K less VAT which I calculate at ~E168K therefore I think the stamp duty will be charged at 3%
 
Re: Clawback on Stamp Duty

jamesgm said:
Hi CCOVICH/liteweight,

I actually agree with ramble but I have to question your advice on both questions:-

1)
I am taking the following from the Revenue website under the heading Stamp duty on new houses and apartments
If the area of the house or flat is greater than 125 sq. metres (1,346 sq. feet), some stamp duty is payable if the Chargeable Consideration is above the relevant exemption threshold. (The stamp duty is assessed on either the cost of the site or 25% of the cost of the site plus the building costs (less VAT), whichever is the greater figure. This figure is called the Chargeable Consideration.

The exemption threshold is E127K so at 25% of E310K(less VAT) I calculate my stamp duty as owner occupier will be assesed on ~E77.5K therefore I am exempt.
Click to expand...

Well the info I posted above is taken verbatim from the [broken link removed], and would seem to suggest different-but I'm no tax expert.

jamesgm said:
2)
Stamp duty is calculate on the figure less VAT so E195K less VAT which I calculate at ~E168K therefore I think the stamp duty will be charged at 3%
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Was VAT payable on the full purchase price?
 
AFAIK the rate of Stamp Duty is determined by the full price (ie incl VAT). The amount of SD is determined by the ex-VAT figure.
 
Hi CCOVICH,

I looked at your revenue web link and it pretty much says the same thing as place I looked. I guess the keyword here is Aggregate Consideration and what this actually refers to.

Like yourself I'm no tax expert so I will have to see what the solicitor says - they are the ones responsible for deducting stamp duty.

Thanks for all the help.
 
To correct Big M, both rate and amount of stamp duty are based on the net of vat price, vat is charged on the whole consideration of a new build.

There could be stamp duty on a new build over the floor area costing 310,000 if the site fine (ie the amount on the site contract ) exceeds 127,000 - ie the site fine is greater than 25 % of the total price and is over the stamp duty threshold.
 
ramble said:
To correct Big M, both rate and amount of stamp duty are based on the net of vat price, vat is charged on the whole consideration of a new build.
Click to expand...

Thanks Ramble (now amn't I glad put AFAIK before my post!!:D )
 
Can someone out there confirm or otherwise my work here..many thanks.

"Stamp duty is assessed on the VAT exclusive consideration, Sections 48 and 56 of the Stamp Duties Consolidation Act 1999 provide that the chargeable consideration for stamp duty purposes is to exclude any VAT chargeable under Section 2 of the VAT Act 1972 on the sale or lease."
From revenue link..

297k less VAT at 13.5% = 40095....297,000-40,095= 256,905.

Seeing as 297 and 256,905 are both between the band 254k-317.5k rate =5% no confusion here.

Therfore liability = 256,905x5%= 12,845

It is not 297 x5% = 14850 is it???

Or is the vAT 21% by any chance??

many thanks
MB
 
monkeyboy said:
Can someone out there confirm or otherwise my work here..many thanks.

"Stamp duty is assessed on the VAT exclusive consideration, Sections 48 and 56 of the Stamp Duties Consolidation Act 1999 provide that the chargeable consideration for stamp duty purposes is to exclude any VAT chargeable under Section 2 of the VAT Act 1972 on the sale or lease."
From revenue link..

297k less VAT at 13.5% = 40095....297,000-40,095= 256,905.

Seeing as 297 and 256,905 are both between the band 254k-317.5k rate =5% no confusion here.

Therfore liability = 256,905x5%= 12,845

It is not 297 x5% = 14850 is it???

Or is the vAT 21% by any chance??

many thanks
MB
Click to expand...

On a new house/apt costing 297,000 the SD calculation is:

297,000 less Vat @13.5%(35,326) = 261,674

Applicable rate of SD = 5% (full rate)

Therefore SD is 13,083.70

(in your figures you seeing the 297,000 as 100%, its actually 113.5% as the Vat is added on to the cost price)
 
Ah yeah....silly omission. So....

297=113.5%

297/113.5 x 100= 261,674 = ex VAT cost of property.

5% of 261,674 = 13083.70 = Stamp clawback.

This sum can also be offset against rental income Im pretty sure too. So at 1300/m no tax in year 1 when others expenses are included.

cheers.
MB
 
monkeyboy said:
This sum can also be offset against rental income Im pretty sure too. So at 1300/m no tax in year 1 when others expenses are included.

cheers.
MB
Click to expand...

I don't think you can offset the stamp duty against rental income.

Any experts care to confirm or correct ?
 
guys i'm buying a home for 265k(not FTB) which SD was explained to me at 5% of purchase price.......am i right in saying it would work out at 13250(not rental home)
 
If its new zero but if 2nd hand Id imagine seeing as the VAT is already paid your calc is based on 5% of the whole amount. so 13250 seems right.
Difference for me was mine was new and therefore I can deduct the VAT element from the calc...interesting to get confirmation that the 2nd hand is calc'd on the full sale price...Im sure it is as you are NOT paying any VAT. The vendor had paid it already.
 
monkeyboy said:
If its new zero but if 2nd hand Id imagine seeing as the VAT is already paid your calc is based on 5% of the whole amount. so 13250 seems right.
Difference for me was mine was new and therefore I can deduct the VAT element from the calc...interesting to get confirmation that the 2nd hand is calc'd on the full sale price...Im sure it is as you are NOT paying any VAT. The vendor had paid it already.
Click to expand...


MB your correct its 2nd hand.....just a B***H paying that amount!!!!
 
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