So there is definitely no way you can purchase a new or secondhand property and avail of S23 relief that was higher then the purchase price and any EA's that say different are completely wrong?
It would not make any sense whatsoever,if I buy a sec 23 for €100k in Longford and get €240k (price at top of the tiger)to write off against tax ?
The E/a really should know better,be careful with this guy,the section could be exhausted if property was bought more than 10 years ago.
Ask to see the Letter of Compliance issued by the Dept of the Environment and also a separate letter showing how the calculations for relief are arrived at.
It should show
Tax Relief= Purchase price x Construction cost/construction cost + site cost
Dont ask me to explain the above but without these two pieces of paper you will not be claiming any section 23 relief.
Have a good read of this.
Thanks. My last post crossed with this post, but reading the PDF it certainly looks like the new lower purchase price is the multiplier for working out the S23 available as you and Joe_90 said.
A builder buys a derelict property for €100,000. He spends €60,000 directly on refurbishment
and €4,000 on marketing and selling the refurbished property. A delay in obtaining planning
permission results in him being unable to get all of the work done within the qualifying
period. Work to the value of €10,000 is carried out outside of the qualifying period. He sells
the refurbished property for €250,000 (VAT inclusive) to Mr. Nolan.
The qualifying expenditure according to the formula is as follows:
€250,000 X €50,000
€60,000 + €100,000 = €78,125
Mr. Nolan’s qualifying section 23 expenditure is €78,125
Example 2
Mr. Nolan was unexpectedly forced to sell the house in the previous example before it could
be used. He sold it to Mr. Hurley for €230,000. Mr. Hurley’s qualifying expenditure
according to the formula is as follows:
€230,000 X €50,000
€60,000 + €100,000 = €71,875
Mr. Hurley’s relief is €71,875 as it is lower than €78,125, which was the relief that would
have been due to Mr. Nolan. If Mr. Hurley had purchased the house for €260,000, the
qualifying expenditure according to the formula would have been €81,250. In this case, Mr.
Hurley’s relief would be limited to €78,125, i.e. the amount of Mr. Nolan’s relief.
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