Stamp Duty Deductions

G

ger.mcmahon

Guest
I am buying an investment to be used as a holiday home and to be let out some of the year. How is stamp duty calculated and what can you deduct from the purchase price in determing the percentage brackett. I know the brackets change at 254000 and if you buy a house for say 270000 is there anyway to get the number down. The house needs a good bit of work done to it to bring it to being liveable. There is also a seperate garage with the property.

How are fixtures, fittings and furniture treated with respect to either bring the number down for the percentage bracket or just the amount you actually caclulate the stamp duty on. How does one actually calcualte the value of the fixtures, fittings and furniture.

Is there is no real point in putting down an lower price for the purchase (towards lowering the stamp duty percentage) and giving the rest as a different kind of payment. I am not sure if that is actually illegal provided but parties pay taxes correctly. I know then when you come to sell the property that your CGT will be based on a bigger value and the extra CGT will probably be greater than the stamp duty saved.

cheers,

ger.
 
Rate on purchase up to €254000 is 4%, and from €254000 to €317,500 it is 5%. For eg house being bought for €270000.00. But there are contents worth 20,000 going with the house. The stamp duty will be calculated on €250000 ( i.e €270,000- €20000) @ 5% ( the higher rate). The contents must be genuinely worth €20,000.00. As to who values them, sometimes the auctioneer involved will, or you and the vendor could draw up a list of contents and do it yourselves. Nothing else can be deducted to arrive at the stamp duty amount, unless it is a brand new build, in which case, there is a possibility of a different calculation and the VAT being taken off before the calculation. Is that the case?
 
Stamp Duty is payable on the market value of the property. It is not a question of "bringing the number down".

There is a very good discussion on this and contents on this website - search - "Stamp Duty - need to pass assets by delivery"

Oh and "giving the rest as a different kind of payment" - thats a sort of fraud on the Revenue - its called paying cash "under the counter".

I'm sure you did not appreciate that - its difficult when first looking at stamp duty rates and applicability to work it all out but your queries are fairly standard for newbies to stamp duty.

mf
 
Thanks. I figured as much.

When purchasing a house, garage and 1 1/2 acres of land (site) can the purchase be broken up to reduce value in determining stamp duty percentage bracket.

Also can any of the refurbishment costs of fixing up the property be included.

cheers,

ger.
 
You could certainly break up or apportion as between the land and house- depending on the lay out- for eg if there is a possibility of a second site, then you could apportion between the existing house and surrounding plot and the site. The vendor may not agree- something you should also look into if they otherwise might not have a CGT problem. As between the house and garage, I doubt it, unless you are saying the garage in itself has some commercial ( non residential) possibility, but you have to look at the non-residential stamp duty rates to see if apportionment will save you money, and also down the line you must remember that while the investment house might become your ppr, a seperate site or non-residential area will not.
 
You Would Want To Be Careful, If You Under Declare Then When You Come To Sell The Holiday Home, Purchase Price Is Lower And Any Gain Both Real And Difference In Disclosed Price Is Taxable At 20% Based On Current Rates, So Whilst May Save 1% Now Would Be Liable To 20k At 20% Based On Your Example.
 
If it is a new build it will incluse VAT at 13.5% (roughly 11.89% of the gross sales price)
On a house costing €270 then you will be under the €254 threshold after you take out the VAT
Make sure you mention this to the solicitor before you purchase, they have overlook it from time to time

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