Do stamp duty rates dictate the selling price?

T

thejuggler

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Contemplating putting my home (3 year old 3 bedroom semi Cork surburbs) on the market. Have seen a few in the estate on the market already this year. guide price was €365k. Does this indicate that the final selling price will go no higher than 381k (the stamp duty cut off point)?
This would be roughly 4.5 per cent higher than the guide price.
What happens in practice - do bidders offer cash to push the bids higher?
 
Re: Do stamp duty rate dictate the selling price?

thejuggler said:
do bidders offer cash to push the bids higher?
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I presume you don't mean cash under the table above the "official" price on which SD will be calculated - i.e. fraud/tax evasion?
 
I am wondering if that does go on. Are all 3 bed semis selling for 381k or are buyers going beyond the 381k stamp duty barrier.
 
This happened last year when we started looking. Scarily, I'm talking about 317,500 rather than 381K. To be honest, I think buyers are fairly realistic. Some will arrive with the limit as their max, others will be prepared to pay more.

I think it's more of an advertising tool to be honest; a ploy to get people through the door. Certainly, as prices rose, we used to view these houses knowing full well that they would rise above the limit.
 
I too was looking at the €317,500 mark (advertised as €300K+) and every single house I looked at and bid on, that's every single house, 100%, they were looking for cash over the SD limit. Every one. Bar none. This was up to around the €325K. Over that most wouldn't deal with cash although a few would. And yes, I did offer it myself as I wouldn't have gotten a house otherwise.

Don't fool yourself into thinking this isn't happening.
 
I agree with you Ballyman. I know of 2 incidents where friends were offered 20,000 cash over the threshold. As it turns out both of their houses went over the threshold anyway after a couple more weeks on the market. It's all very well to say you don't approve etc. but it's hardly surprising. The stamp duty in this country is a disgrace both from a seller and a buyer's point of view and if the government weren't so greedy people wouldn't have to resort to this kind of thing.
 
Realistically do the research - they all stay very close to the cut off - who is going to pay such excess in stamp duty. it's keeping house prices down in some areas.

whether under the table stuff goes on...not too sure on that - but that obviously has implications.
 
lmd said:
The stamp duty in this country is a disgrace both from a seller and a buyer's point of view and if the government weren't so greedy people wouldn't have to resort to this kind of thing.
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Maybe if fewer people engaged in the sort of SD tax evasion as outlined above then everybody would have to pay less tax? In my opinion the greedy fraudsters/evaders are the disgrace here - not the government or the tax authorities. Of course we'll always have some people who excuse/condone/rationalise tax evasion while hypocritically claiming that taxes in this country represent some sort of rip-off. :rolleyes:
 
Well Clubman if you were selling your property and couldn't get punters to go over the threshold because it will cost them another 12,000 or so perhaps your views would differ. I'm not condoning what goes on, I'm just saying it's not surprising.
 
lmd said:
I'm not condoning what goes on, I'm just saying it's not surprising.
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This sounds like condoning or at least excusing to me:
It's all very well to say you don't approve etc. but it's hardly surprising.

...

if the government weren't so greedy people wouldn't have to resort to this kind of thing.
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Nobody has to resort to fraud/tax evasion.
 
Thanks SWF, I'm sure most people agree! Clubman, I'm certainly not going to get into a petty argument with you, I've better things to do with my time!
 
lmd said:
Thanks SWF, I'm sure most people agree! Clubman, I'm certainly not going to get into a petty argument with you, I've better things to do with my time!
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Well I think you're both completely wrong. I don't own a property so it's not like I'm sitting back in the comfort of already being on the oul property ladder. Tax evasion is a completely false economy. The risks involved should be self evident.

The Revenue in Ireland has a track record of seemingly allowing tax evasion to pass by for years before nabbing huge tracts of people at once. Despite the nod and wink that your solicitor may be giving you this is no better than the advise bank officials at NIB gave out to their clients involved in the Ansbacher accounts in the 80's. These people were all caught, many of whom had already passed on and in fact their children were hit with bills for 100's of thousands of euros.

Avoiding stamp duty today of E13K could very easily turn into a bill for E100K in 5/10 years time once penalties and interest are added on.
 
Tarquin said:
At the same time however, I would resent more paying penalties and tax down the line (still have yet to hear of anyone who has had to, though).
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These things tend to come in co-ordinated batches. I wouldn't be surprised to hear of an amnesty being announced sometime in the next 5 years before Revenue make their move.
 
Howitzer said:
Despite the nod and wink that your solicitor may be giving you this is no better than the advise bank officials at NIB gave out to their clients involved in the Ansbacher accounts in the 80's. These people were all caught, many of whom had already passed on and in fact their children were hit with bills for 100's of thousands of euros.
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I'm pretty sure the Ansbacher and NIB situations were largely unconnected other than the obvious fact that both were examples of tax evasion. The NIB customers were advised to invest in a scheme in the Isle of Man that NIB promoted.
 
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