Delay closing date to wait for budget?

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philcsl

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I'm buying a house with a friend, both FTBs, for €338k. The closing date is 16th Nov, the vendors pushed back the original closing date by 2 weeks.

Our solicitor rang today to say we can ready to close on the 16th but asked if we were in any hurry and if not that it would be a good idea to wait for the budget on 7th Dec incase there is any change in stamp duty.

I know it’s very unlikely that there will be a change in stamp duty according to most people, but for the sake of the €10,000 which we will be paying in stamp duty, would it be worth hanging on 3 more weeks on the off-chance that either stamp duty is abolished or even the lower limit increased to €338k or higher for FTBs?

We were planning on paying the full amount of €338k on closing date so did not have to pay a 10% deposit.

If we push back the closing date, the vendor has the right to charge us interest on the money we will be paying, does anybody know how much this would be or what rate they would charge at?

The other option is we could pay the 10% deposit now and pay the remaining amount on 7th Dec when we close. If there was a change in stamp duty, would we still be eligible for the new rate as we have not closed or would we be liable at the rate when we paid the deposit?

Any advice would be great, thanks.
 
My Solicitor advised me that the actual date of "purchase" would be the date the deed was deemed stamped - ie the closing date.

My sister is in the same position as you, although they are not FTB's. They are signing their contract now, but not closing until the Budget just in case they do make any saving. There is also no guarantee that any changes in the Budget (if any) will be implemented straight away either.
 
There was someone on the radio recommended look now potetnialy agree a price. No way contracts will be signed until after the budget.

If you wait and stamp duty changes more than likely prices will rise on the back of that.

Hard to know.
 
MandaC said:
There is also no guarantee that any changes in the Budget (if any) will be implemented straight away either.
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Isn't it the case that the Finance Bill would have to be signed into law before any changes can take effect (I'm open to correction on this)?
 
I'm in a similar postion but thought the same CCOVICH. ie most changes made in budget regarding social welfare etc don't come into play until March.
 
Andy_and_lou said:
I'm in a similar postion but thought the same CCOVICH. ie most changes made in budget regarding social welfare etc don't come into play until March.
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Stamp duty changes are usually effective from the actual day of the budget.

From the 2003 budget speech:
http://www.budget.gov.ie/2003/speech03.asp#Stamp

No changes have been made to the rates of stamp duty on commercial property since 1990. I propose to increase from today the current rates of stamp duty on non-residential property and to amend the valuation bands to which they apply. The full details of the changes are set out in the Summary of Budget Measures.
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From ireland.com, this question was asked on budget day (2/12/2004) - stamp duty was effective from that day:
[broken link removed]
 
CCOVICH said:
Isn't it the case that the Finance Bill would have to be signed into law before any changes can take effect (I'm open to correction on this)?
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I've had a look through the 2006 budget and based on that I would expect changes to SD (if any) to take effect on 7th Dec.

There was a small change to SD last year and they abolished something called Companies Capital Duty which took effect on the 7th Dec, also changes to CGT and tax relief on loans etc all came into effect immediately.

I presume Mr Cowen decides this but it would not make sense to delay any changes till Jan or March as nobody would buy until then.
 
Any changes could come into play straight away, or could have to wait till the Finance Bill is signed - the capital duty change was not expected last year and that was implemented straight away - but there is no way of judging.
 
MandaC said:
Any changes could come into play straight away, or could have to wait till the Finance Bill is signed - the capital duty change was not expected last year and that was implemented straight away - but there is no way of judging.
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The 2001 [i.e. Budget 2002] changes, as I recall, came into effect as of the following day. I think - and would be surprised if anyone can find anything to the contrary - that Stamp Duty changes always have immediate effect. If not, and the changes are favourable to buyers, it would cause a complete market freeze until the Finance Bill is enacted, which is exactly the kind of effect the Gov't is currently trying to avoid.

In answer to the OP, I think the interest the buyer may charge is usually in the contracts themselves, and is probably somewhere around the 5% p.a. mark. Consult your solicitor on the likelihood of the charge being levied. It may cost you a few hundred euro, and there's no guarantee that stamp duty will change. On the other hand, if I were in your position I might well (only might, and depending on just how tight money was) be inclined to take the gamble - just be aware that if you do that you may have to fork out the SD anyway, *and* your "stake"!
 
Thansk Dreamerb, I've checked with the solicitor and it turns out the interest they can charge is actually 12% but she has sees it as very unlikely that the vendor would sue for this interest as it would cost them the same amount in legal fees.

We have instructed our solicitor to request a closing date of 7th Dec and if the vendor is not happy with this we will offer to pay the 10% deposit now and still not close until the 7th Dec (the vendor is not waiting to sell to complete any other sale, I'm not that cruel, the owner had passed away and the house is unoccupied)
 
There's no way they'd announce it at the budget and implement it at a date a few months later. That would cause chaos.

don't want to unduly worry you, but you need to be careful that the vendor doesn't pull out, as the house could go up in value if the stamp duty changed.
 
The Govt usually do whatever suits them regarding when to put budget changes through - in the past they have usually increased the duty on cigarettes/alcohol from midnight that night but only implemented social welfare increases months later - very sneaky.... But I think the other posters are right - whatever SD changes are coming will have to be put through immediately or the housing market will come to a standstill.
 
redbelly said:
don't want to unduly worry you, but you need to be careful that the vendor doesn't pull out, as the house could go up in value if the stamp duty changed.
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The purchaser and vendor have probably signed contracts if they have agreed a closing date and so the vendor could not pull out regardless of the budget?
 
There seems to be a lot of confusion regarding how to structure a house purchase to benefit from any possible stamp duty benefits in the budget. If anyone can shed some light on this i'd really appreciate it

So let's assume whatever changes are made are done in the same way as the 2005 budget.... here is a direct quote from the 2005 budget document:
"The new rate structure will apply to legal instruments relating to these properties executed on or after 2 December 2004."

I'm no lawyer but i'd guess that contract of sale is 'executed' when it's signed -- so contracts must be signed after the budget?

i.e. is the key date the contract sigining date not the sale closing date?
 
My Solicitor advised me that it is the day the deed is duly stamped - ie the closing date, which is the date of change of ownership
 
MandaC said:
My Solicitor advised me that it is the day the deed is duly stamped - ie the closing date, which is the date of change of ownership
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See below for excerpt from revenue website on budget 05

"Contracts -Where a contract has been entered into prior to 2 December 2004 the new rates will apply provided the instrument (e.g. deed of conveyance or transfer or lease) giving effect to the contract is executed on or after 2 December 2004."
 
GarfieldG said:
I'm no lawyer but i'd guess that contract of sale is 'executed' when it's signed -- so contracts must be signed after the budget?
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The advice I was given by my solicitor was that the contract is not 'excecuted' until the cheque is handed over which makes sense. This is done on closing date so it does not matter that I have signed the contract a few weeks ago as the sale is not complete until both contracts are signed.
 
philcsl said:
The advice I was given by my solicitor was that the contract is not 'excecuted' until the cheque is handed over which makes sense. This is done on closing date so it does not matter that I have signed the contract a few weeks ago as the sale is not complete until both contracts are signed.
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The sale isin't even completed when both contracts are signed - its when the deed is signed I think, so you could have both signed contracts a month ago and it would not matter once as you say the money wasnt handed over and the deed signed.

speaking of which - are there 2 copies of contracts - one for signing by the buyer and one for signing by the seller? My solicitor told me today that the vendors solicitor has signed "my copy" and is waiting for the sellers copy?
 
This is the way I was told it, it might be different with each sale:

There are two copies sent (unsigned) from the Vendor's solicitor to the buyers solicitor. The buyer then signs and returns both copies which the Vendor then signs. The Vendor's solicitor holds onto both copies of the contracts until closing date when you hand over the cheque and get your copy of the contract (signed by you and them) which makes it all legal. Then the deeds are transferred.
 
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