Stamp duty question

H

hayeser

Registered User
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18
I purchased my house a 4.5 years a go when the stamp duty treshold was 190K paying 10k in stamp.

I am now looking at buying a house (second hand) with my girlfriend for 300K (in her name). The idea is that we would live in my house an rent this new place. However this will make the house we are buying an investment property and make us liable for 5% stamp - another 15K to the government!

As far as I know we would need to own the house for 5 years before we could rent it out without being liable for stamp.

Is there anyway around this? We are getting married next year is there any allowance to allow someone convert their primary residence to an investment property on getting married to move in to their partners property even it the 5 years is not up?

Ideally we want to live in my property as the one we are buying is small more suited for investment but we would certainly live in it for a year or two if it was a means of avoiding taking the hit on the stamp ..

Any help appreciated, thanks,

Sean
 
Whatever way you look at it - you're an investor.

FTB relief is designed to help people get on the property ladder. Its not supposed to be a facility to help people build up an investment property portfolio.

Google First Time Buyers Revenue for lots of information on FTB's and who can be considered one.

mf
 
Sorry about that, I was debating which forum to go for - obviously picked the wrong one!

True, I suppose there's no getting away from the fact you are an investor. I was just thinking it must be very common for two people to get married now days, both owning properties as first time buyers for less than the 5 years.

Obviously a married couple are going to live together and rent the other property. Wishful thinking I suppose that there was an exemption for this!

I paid 3% stamp on my property, I won't own it for 5 years until July '08. If I am to rent it in the meantime does this require me to pay the the extra 2% (to bring it up to 5% investor stamp) on the full purchase price ? Wishful thinking again I suppose that there is a sliding scale where 90% of the 5 year term is up...
 
hayeser said:
Obviously a married couple are going to live together and rent the other property.
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It's not obvious at all that they would retain and rent out the second property. I'm sure that many couples would also consider selling it and avail of the full CGT exemption on one spouse's former PPR? Have you read this thread?

Sell home or keep as an investment?
I paid 3% stamp on my property, I won't own it for 5 years until July '08. If I am to rent it in the meantime does this require me to pay the the extra 2% (to bring it up to 5% investor stamp) on the full purchase price ?
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Yes - you are liable for the full difference in SD between what an investor would have paid and what you actually paid on the original purchase and at the SD rates that applied at the time.
Wishful thinking again I suppose that there is a sliding scale where 90% of the 5 year term is up...
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No - all or nothing I'm afraid.
 
ClubMan said:
It's not obvious at all that they would retain and rent out the second property. I'm sure that many couples would also consider selling it and avail of the full CGT exemption on one spouse's former PPR? Have you read this thread?
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Jaysus, you'd get away with nothing here

That was just poorly worded on my part, what I meant was obviously they won't be living in both houses and should they decide to keep second one (which they would then almost certainly rent) what would their situation be ..

Thats great though Clubman, thanks for clarifying. Hopefully the purchasing of the new house will drag on into the new year and bring us a bit closer to the 5 year mark on the first property.
 
hayeser said:
Thats great though Clubman, thanks for clarifying. Hopefully the purchasing of the new house will drag on into the new year and bring us a bit closer to the 5 year mark on the first property.
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Obviously you could also leave the former PPR vacant and only rent it after the 5 year period has elapsed assuming that you can service the loan in the meantime (or switch it to interest only or whatever). You probably need independent, professional advice on the tax and investment issues involved to be honest.
 
I think that is the best plan alright, to leave the PPR vacant. The house being purchased is having work done on the vendors house insurance policy prior to the sale so with a bit of luck we'll only be servicing 2 loans for a few months once the sale goes through.

Thanks again,
Sean
 
hayeser said:
The house being purchased is having work done on the vendors house insurance policy prior to the sale
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What do you mean by this? That you are in some sort of legal negotiations about something that may delay the closing of the purchase of the new property?
 
Results of our engineer's inspection found that the house required under pinning. This is covered in the sellers house insurance policy so they are claiming and having the work carried out prior to the sale closing.

This is common enough in Cork where subsidence is an issue in large parts of the city. Most insurance companies won't insure against subsidence in certain areas of the city now days unless the house has been underpinned.
 
You got a lucky break in the budget there! The stamp duty clawback period has been brought down to 2 years, so you can rent it now if you like without incurring any clawback. Best of luck with your purchase.
 
Afuera said:
You got a lucky break in the budget there! The stamp duty clawback period has been brought down to 2 years, so you can rent it now if you like without incurring any clawback. Best of luck with your purchase.
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Do you know if this is with 'immediate effect'? Thanks.
 
You got a lucky break in the budget there! The stamp duty clawback period has been brought down to 2 years, so you can rent it now if you like without incurring any clawback. Best of luck with your purchase.
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Thanks Afuera, that was a real stroke of luck alright!
 
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