Stamp duty on new office first rental

C

Cityliving

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Hey there,

Friend bought an Apt for 200K approx and has since changed the use (PP and legal all sorted) to commerical office space. Having had ownership for less than 5 years as a FTB what is the clawback for use as a commercial premises now.

It is the same as the landlord 4%?

With thanks
 
I'm interested in this. Is it possible that there is no clawback? If they are deriving no rent? Or does the fact that ( presumably) its not their residence change that?

Interesting.

mf
 
I am in a very similar situation. I rang the Revenue and talked to somebody about the SD implication. I was told (I have the name of the person) that it would be 4% and not the higher commercial stamp rate of 9% which I was expecting. If this was a new build, don't forget to remove VAT on the price of the apartment before calculating the 4% due. This may in fact bring your SD down to 3%.

[broken link removed]
 
Don't necessarily take the information given out by Revenue as authoritative. They can and do make mistakes. If in any doubt get professional advice.
 
I'm not a stamp duty expert because I usually leave it to solicitors but my view on this is...

If it was an apartment when it was purchased then the residential rates applied. IF there is a clawback then it can only be at the residential rate. There is no mechanism in the Stamp Acts for the charge to be on one basis and the clawback to be on another.

There is no clawback unless rent is derived. So changing the use from residential to commercial does not trigger a clawback unless there is also rent being derived. If the owner uses it as a sole trader there is no problem because you cannot rent to yourself. If they allow occupation rent free to a company they own then there is no problem either.

One other issue to mention is that using it for commercial purposes means you are liable to commercial rates if the local authority become aware of it (well, you are liable either way but you might only pay it if they become aware!)
 
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