ftb selling within 5 years: stamp duty implications

S

steveyd

Registered User
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I am confused regarding the clawback on stamp duty for a first time buyer. It is my understanding if a ftb sells his home within 5 years he will not incur any stamp duty clawback. Only if the ftb rents it out will they be liable. Is this correct?
 
Yes - that is correct. The SD clawback only applies where a property originally bought as an owner occupied PPR is rented out (other than under the rent a room scheme) within five years of purchase.
 
It says " the thw two key elements of the stamp duty relief for ftb are that it must be your ppr and you must nor rent or sell it for the first 5 years of ownership"
 
Seems inaccurate alright. Was that page 8 of the business section because I couldn't see it on page 8 of the newspaper itself?
 
Quote from Revenue.ie

"A clawback arises if rent is obtained from the letting of the house or apartment for a period of 5 years from the date of the conveyance or transfer, other than under the rent-a-room scheme. The clawback amounts to the difference between the higher stamp duty rates and the duty paid and it becomes payable on the date that rent is first received from the property. A clawback will not arise where the property is sold to an unrelated third party during the 5-year period."

Seems fairly straight forward to me
 
How much do I owe??

Changed my old PPR to an investment property summer 2004. Bought the apt in july 2002 for 216k. Informed the revenue of the change of status of the apt. Sold the apt last month for 306k and contacted the revenue to see how i go about paying the stamp and cgt issues. I understand how to calculate the amount owing to the cgt but the stamp duty owed seems difficult. Can anyone help?
 
The SD should have been paid in Summer 2004 when you first rented the property out so interest and penalties could apply. The SD owed is whatever an investor would have paid on the property in July 2002. Simple as that.
 
Thanks Clubman

Thanks for the reply clubman. When calculating the cgt owed, i deduct all expenses from the sale price (e.g. mortgage outstanding, solicitor bill etc) and do i include the stamp duty owed as an expense to be deducted as well.
 
Re: Thanks Clubman

16024 said:
e.g. mortgage outstanding
Click to expand...
This is wrong. The CGT is calculated on the sale price less the purchase price (indexed for inflation up to December 2003 (?)) less any allowable expenses (including SD) less your annual CGT allowance less any previously incurred capital losses (e.g. eircom) etc. In this case there will also be some allowance for the fact that the property was your PPR for a period before being rented out. The outstanding mortgage is not an expense and is irrelevant. You really should get independent, professional advice on this or you may end up either paying more than you need to or less than you owe and ending up with further outstanding liabilities.
 
My name is kirk and i would like to say hello to everyone.
 
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