Stamp Duty Reform Budget 2008

P

PrivateI

Registered User
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Some SD reform at last
All previous SD bands abolished with respect to residential property trasactions.

New system
First 125,000 exempt from SD
126,000-1,000000 7% SD
Moiety >1,000000 9% SD

SD claw back reduced from 5yrs to 2yrs

Probably not enough to kick start the once booming property market but still first time buyers are assured a more equitable system all round. The reduction in SD clawback to 2 yrs will suit first time buyers as a 2 yr committment is a lot fairer than the previous 5yr system.
 
7% is still ouch

5% below a million would be much more palatable

give with one hand - take with another

just made it more enticing to be a FTB with deep pockets / rich parents - especially with only two year SD clawback - after all it's FF FFS
 
So does this mean all previous bands are now abolished? So for example 7% is applied to a house worth, say 350k, whereas before the rate was lower. I don't get it
OR
Does it mean that the 7% rate is applied to the difference between selling price and 125k, in this instance, 175k, which would give a stamp duty bill of 12K.
Is this correct?
 
Conshine said:
What does this mean?
Click to expand...


Up to now a FTB qualified for SD exemption under certain circumstances.
However to limit speculation the condition of availing of this exemption was that you could not rent the property(excluding rent a room relief scheme) within 5yrs or else the Revenue would claw back the SD. This has been changed in todays budget to 2 yrs.
 
I bought my house in 2004 will the new 2 year rule apply to me if wish to rent it out next year?
 
amgd28 said:
So does this mean all previous bands are now abolished? So for example 7% is applied to a house worth 350k??
Click to expand...

Yes all previous bands are abolished.

As far as I know the first 125,000 of any property purchased is exempt from SD. Between 126,000 and 1,000000 will be charged at 7%. This is different from the previous system where the higher rate of SD applied to the full amount once the threshhold was passed. Now the higher rate only applies to the amount above 125,000.

In your case the SD would be 15,750 which equates to an overall rate of 4.5% on a property worth 350k
 
Dinny said:
I bought my house in 2004 will the new 2 year rule apply to me if wish to rent it out next year?
Click to expand...

Dinny, I would imagine that the new 2yr exemption will apply to everyone regardless when the property was purchased.
 
Am I right in thinking that the claw back is only really of benefit to people who intend renting out their properties?? i.e. This only helps the people who have properties to rent them out and is not helping young people buy houses but may increase the amount of properties for rent?
 
AMGD28

In your example of €350k, you will now pay €15,750 compared to €21k previously.

SM
 
Doesn't this mean that we'll be paying much MORE stamp duty on average priced houses? Am I missing something? The old bands ranged from 3% to 9%.

So for example on a house worth 350,000 you would pay 6%. Now they pay 7%. How is that reform!?
 
camel said:
Doesn't this mean that we'll be paying much MORE stamp duty on average priced houses? Am I missing something? The old bands ranged from 3% to 9%.

So for example on a house worth 350,000 you would pay 6%. Now they pay 7%. How is that reform!?
Click to expand...

You only pay 7% on 225,000(350,000-125000) which is less than 6% of 350,000. 5250 less to be exact.
 
Becuase before the "reform" stamp duty would be charged on the whole price. The way it works now, SD is only charged on the excess (225,000 @ 7% for 350k house).
 
Price Old SD New SD
200,000 8,000 5,250
250,000 10,000 8,750
300,000 15,000 12,250
400,000 30,000 19,250
450,000 33,750 22,750
500,000 37,500 26,250
700,000 63,000 40,250
1,000,000 90,000 61,250
1,500,000 135,000 106,250
 
Got it, thanks guys. I didn't see it mentioned anywhere that it was graded like that. Cool.
 

Just to doubly correct this, the clawback only ever applied to first time buyers wanting to rent out their home in the first five years, not to those intending to sell.
 
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