Stamp Duty:

Hi All,

I purchaed a property in Dec 2003 with my then girlfriend for 305,000. It was a new property and we were both FTB's. We had a mortgage for 270,000 at this time. We broke up in June 05 and I purchaed her half of the property of her in July 2005 for 155,000. I had not purchaed property since.

This went through fine. I got a new mortage in my name for 280,000 and gave her 23K euro.

Yesterday my solictor rang me and said revenue wanted stampt duty of 3% of 155,000. Accouding to revenue website below and revenue stamping office when I call I should not be liable for this?

What would your taughts and advice be in relation to this issue.


Revenue Website.


What is the position where a person, who had obtained first time buyer relief on the joint purchase of a house with another first time buyer, subsequently acquires the other joint owners interest in the house? A person who obtained first time buyer relief on the purchase of an interest in a house would not be precluded from obtaining first time buyer relief on a subsequent purchase of another interest in the same house provided that person has not purchased another house or part of another house in the intervening period.

Yesterday my solictor rang me and said revenue wanted stampt duty of 3% of 155,000. Accouding to revenue website below and revenue stamping office when I call I should not be liable for this?

Hi,

If you had bought out your partner for €127,000 or less, you would not be liable for stamp duty.

Over €127,000 you ARE liable.

sorry!

wexford said:

Yesterday my solictor rang me and said revenue wanted stampt duty of 3% of 155,000. Accouding to revenue website below and revenue stamping office when I call I should not be liable for this?

Hi,

If you had bought out your partner for €127,000 or less, you would not be liable for stamp duty.

Over €127,000 you ARE liable.

sorry!

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What does the above extract from the revenue website cover then?????

the extract from the revenue website relates to first time buyers mortgage interest relief - that you will keep. the extract doesn't relate to stamp duty at all.

Also, the mortgage interest relief for an individual is capped - i think it's about €62, so you may have been getting higher interest relief when the mortgage was in two names...

best to ring revenue and ask them....

where does the 23k come into it?

This is under stamp duty section on the revenue website. Nothing to do with interest relief. Other posts on this website suggest that other purchasers in simmilar sitiuations did not pay.

When I ring the stampting section thay tell me that I am not liable to stamp duty.

All the advice I rec'd of revenue before the purchase and after the purchase suggested that I will not be liable for stamp duty.

Why is it not clear if you are liable or not?

The 23K is the price I paid her

Value 310000 - Mortage 27000 = 40,000/ 2 = 20K plus three for goodwill.

mike456 said:

What does the above extract from the revenue website cover then?????

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i think it may be instructive to show the actual context of the above quote, which does indeed refer to Stamp Duty relief for 1st Time Buyers.

Here is the link [broken link removed]

Note, this states

The revised stamp duty rates, which apply to instruments executed on or after 2 December 2004

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.

I am not quite sure what the implications of the date is, but it looks as if you have a case in relation to exemption from Stamp Duty.

Maybe it's because you now are not considered a FTB - since you bought her out, that's like your second purchase, because it's a whole new mortgage setup?
I could be totally wrong here.

The 23K is the price I paid her

Value 310000 - Mortage 27000 = 40,000/ 2 = 20K plus three for goodwill.


I think this is what the problem is. Revenue had a problem for ages with the fact that when one joint owner bought the other out and got a new mortgage, it looked for all the world as if there was a full half interest passing without the debit aspect of the outstanding mortgage so here , as no mention is made in the Deed to the outstanding mortgage, it looks as if the full market value of the half interest ( 155K) is passing ( even though only 23K is being paid). However, even then you should enjoy the extension of FTB exemption up to 317K.

What often used to happen was that the original lender would release the exiting owner from the mortgage in the same deed passing the half interest in the property with the now full owner taking full responsibility for the mortgage. That made it quite clear in the deed that the value passing was subject to the half interest in the mortgage.

I don't think you have a liability but it may well be worth your while having your solicitor do a written submission to Revenue to seek written confirmation.

mf

The Revenue response to your query relates to interest relief on your mortgage not Stamp Duty. If your property is presently valued between 317k and 381k the figure of 3.00% that your Solicitor quoted is correct. The figure of 3.00% is half the full Stamp Duty rate of 6.00% payable on second hand properties in that price range.
Hiney FS

hineyfs said:

The Revenue response to your query relates to interest relief on your mortgage not Stamp Duty. If your property is presently valued between 317k and 381k the figure of 3.00% that your Solicitor quoted is correct. The figure of 3.00% is half the full Stamp Duty rate of 6.00% payable on second hand properties in that price range.
Hiney FS

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The house is valued at 310K, i owned half so other half at 155K.

Accoding to your persumtions I would have no libality?

Also it is not a reply it is on the Revenue website under STAMP DUTY as per link posted below?
[broken link removed]

sorry, mike456, your original post said: I purchaed her half of the property of her in July 2005 for 155,000.

THEN you said: gave her 23K euro.

It's this clear: if you purchased her half for less than 127,000 (i presume you mean the 23K) then you are NOT liable for ANY stamp duty. None. In other words, you took over the entire mortgage that was previously in joint names and bought her out for 23k. No stamp duty and you retain full FTB status.

If you purchased her half for 155K,(ie - you GAVE her 155K which you stated in the beginning, then as this is over 127,000 you ARE liable for stamp duty.

So did you pay her 23 or 155? This amount should be clearly stated in the legal agreement between you and your ex - which you are paying your solicitor to draw up

I gave her 23K.

Value 310000 - Mortage 27000 = 40,000/ 2 = 20K plus 3K for goodwill.

Hi Mike

I think ppl are obviously not looking at the link we both posted, where it is obvious that your status as FTB in relation to Stamp Duty liability is covered.

Nothing to do with Mortgage Interest relief!!!!

A person who obtained first time buyer relief on the purchase of an interest in a house would not be precluded from obtaining first time buyer relief on a subsequent purchase of another interest in the same house

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You have acquired your ex-partners interest in the house which you jointly purchased with her in 2003. You gave her a fair price for her interest. You financed this by re-mortgaging the house for 280K.

I would contact the Solicitor, as advised by mf1, whose advise seems to be definitive.