Structuring house purchase to avoid stamp duty?

U

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I have verbally agreed the purchase of a 2nd hand house at 382k (just above the stamp duty thresh-hold). Is there any way I could finalise the deal to keep the stamp duty under the 381 level ? There's a sizeable difference if possible.

Any help appreciated
 
Re: Eileen

Say you will pay 1,000 in cash for the fixtures and fittings....
 
Stamp duty

Thanks. This sounds too simple to be true. Is it definitely possible? I though fixtures and fitting had to be included in overall price?
 
As far as I know you can only do it by having two separate contracts - one for the house and one for the contents and the valuation of the contents must be accurate/reasonable and not just determined in order to avoid (evade) stamp duty otherwise Revenue or your solicitor will object. In general the chargeable consideration (i.e. price of the house and contents) is what determines what stamp duty bracket you fit into and then the stamp duty is charged on the price of the house. I think that this can be legitimately circumvented by splitting the price of the house and the price of the contents and having only the former be the chargeable consideration. Your solicitor should be able to advise and let you know if this strategy is feasible in this context.
 
There is always a lot of confusion surrounding stamp duty thresholds, consideration for property, consideration for contents etc.,etc.

The stamp duty thresholds are fixed and immutable. If you go above them, you pay stamp duty at the higher rate. If you apportion a pruchase price into consideration for house and consideration for contents, and the effect is to breach a stamp duty threshold then you pay stamp duty on the consideration for the house only but at the higher rate applicable to the total transaction : pay higher rate on lower amount.

This is the relevant Revenue Cert. to be inserted in the Deed:

2. that the consideration (other than rent) for the sale is wholly attributable to residential property and that the transaction effected by this instrument does not form part of a larger transaction or series of transactions in respect of which the amount or value or the aggregate amount or value of the consideration (other than rent) which is attributable to residential property or which would be so attributable if the contents of residential property were considered to be residential property exceeds €254,000.

Series of transactions would include a separate contract for contents.

Its important to recognise that there was an old view that you could legitimately apportion the purchase price between house and contents: the difficulty has always been with what is a legitimate value for contents? And the practise had grown up that people were trying to apportion silly money for contents to evade stamp duty. This is what Revenue have sought to stamp out. Judging by the number of times it crops up on this site though I do wonder if its reaching peoples consciousness.

Moral of the story: if you are buying a property and it is likely to breach the stamp duty thresholds, do your sums and see what you can afford and beyond which you will not go. You cannot legitimately enter into a series of contracts to keep contents separate. That is a fraud and is an unenforceable contract. And I know that people do it - but that does not make it right.


mf
 
mf1 said:
You cannot legitimately enter into a series of contracts to keep contents separate. That is a fraud and is an unenforceable contract. And I know that people do it - but that does not make it right.
Click to expand...

Thanks for that clarification. What I posted earlier was posted in good faith but was obviously wrong. Just to be clear - I was not recommending or condoning fraud/evasion.
 
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