Using building agreement to reduce stamp duty on site

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Peadar

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I am purchasing a site from a farmer subject to planning permission for €170k. The rate of stamp duty for this transaction is 9% as it is classed as non residential property.

If there was a building agreement included in the contracts I would pay 3% of site value or 3% of 25% of site value + building costs. At the moment we don't have a building agreement with anyone.

Can we include a building agreement in the contracts with a 3rd party builder and then pay the 3% rate rather than the 9% rate.

This building agreement would have no connection with the farmer, but would state that we are building a certain size house for a certain cost.

We still don't know if the farmer would be agreeable to any other clause being included in the contract, but I was wondering was this an angle that would be worth following.

Thanks
Peadar
 
Has your solicitor given an opinion on this matter?
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Yes, but she is unsure about this area and has never dealt with it this way.

She reckons it is a grey area, because usually the agreement is used when purchasing a site off a developer and the building agreement is with the developer. The law doesn't state that the building agreement must be with the developer, but it must be part of the contract. I was just wondering had anyone any experience doing it this way, using a building agreement with a 3rd party in a contract.

Thanks,
Peadar
 
It won't work. For the site to be sold in this way, there would be VAT chargeable ( almost certainly)
 
It won't work. For the site to be sold in this way, there would be VAT chargeable ( almost certainly)
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Thanks MOB, that makes sense. Whereas a farmer selling a site would not have to charge any VAT, because it's not part of a business transaction.

After making further enquiries last night with a different solicitor he doesn't think it will work either as there has to be a relationship between the Building Agreement and the person selling the site.

Thanks
Peadar
 
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