Purchase to sell immediately

[muzaway]

I have an option to buy a one bed property for €156k in the Santry area, can anybody suggest what kind of tax exposure I would have if I put the property straight back on the market for say 185k.

I am looking to borrow 145 to 150k.

I gather from other posts that I should ensure I am financially in a position to cover the loan for about 5 to 6 months while the property sells.

I'm not really interested in keeping the property for rental purposes as I feel that the area is saturated with quality apartments at a reasonably low rate, and this particular development is not the most impressive and would not command a high rate against such competition.

Any advice on the wisdom of this undertaking would be welcome as I am considering how to proceed.

Thanks,

Muz

 

[mf1]

Ummmmmmmmm.


You buy for 156K. You pay stamp duty (I assume as an investor) @ 3% ( and should that be on actual market value or price being paid?) and legal costs on the purchase. You go to the hassle of getting a mortgage. Do you then kit it out? Or is it kitted out already?

You then sell for 185K - why does the current vendor not sell for this price? You incur more legal costs. And Estate agents fees. And you pay 20% tax on the gain - if you can sell it at that price.

If it all works out, you make a profit. If it does not work out, you have a property on your hands which may or may not rent out.

I am naturally cautious. I don't think I would do it.

mf

 

[techman]

Stamp duty to be paid is based on the the price being paid - excluding VAT.

See here: [broken link removed]

 

[Vanilla]

Except where the price being paid is less than market value when the stamp duty is on the market value. There is also an issue of a gift involved depending on the nature of the option.