a Family affair

A quandry someone may be able to help me with.

Am contermplating selling my house - A very good price on offer. the one I was hoping to buy has gone but interestingly my brother has one in the same aare that I would be intertested in buying. He lives overseas and this is one of two properties he owns - all legit, declated, etc.

He purchased this house a year ago and the price differentail is approx €60K. (i.e €240K to €300k).

IF I approach him with regard to a swop, what are the issues we shoudl be aware of:-
Stamp duty costs
His CGT costs - Is there a cut off point /different levels and/or rates
Legal costs
With current market forces (i.e. drop in rental) would he be better just selling his and investing his cash. If so where can he go to get good independant investment advice?

I would very much appreciate any feedback anyone could offer?

Regards

A Little Sis

What do you mean by "price differential"? Is this the paper capital gain to date?

Even if the issue of acquiring your brother's investment property as a replacement PPR at a discounted price is not an issue here this topic contains some useful information.

You brother will be assessable for CGT as normal on the disposal of the property even though it might be to a sibling. See the Property Investment FAQ and this topic.

on the transfer of capital assets such as property is charged at half the normally applicable rate. This would be the case if your acquisition of your brother's property was not otherwise exempt from stamp duty.

Legal costs would be the normal ones for any property deal with the seller and buyer engaging their own separate conveyancing solicitor.

The question about whether your brother should sell now and invest elsewhere is not a simple (some would argue possible!) one to answer. When seeking advice be aware of the that are authorised/regulated. One might also consider obtaining specific tax advice from a tax professional.

the price differentail is €245K (the purchase price paid last eyar) and €300K - the price I would pay in order to buy it this year.

Thanks for the input and the advice - any other feedback greatly appreciated.

Regards


a Little Sis

Hi 'A Little Sis',

I am also thinking of seeking a swop and wondering whether you got any further advice, did this or how it worked in practice? I heard somewhere else you only pay stamp duty on the differential between the two houses..

I'm absolutely desperate to move to a quieter area since the road adjacent to me has become very busy and noisy since it was extended (though should be no problem to sell as it doesn't seem to bother most other people..).

My email address is: Email address removed at request of poster if you wouldn't mind giving me a quick reply at that as I don't always get to check this site.

Thanks for any help you can give,

Denise

Posting your emai address on a public bulletin board is a sure way to invite junk email from spammers who harvest email addresses from forums like this!

Thanks for the tip clubman - it's only a one-off email address I set up to get responses from forums so let them spam away... is there any chance you can answer my stamp duty question?

I heard somewhere else you only pay stamp duty on the differential between the two houses..


Not true. This used to be the case but not anymore. Stamp duty is payable on full market value of each property - less consanguinity ( family) relief i.e. pay stamp duty at half normal rate.

mf

the price differentail is €245K (the purchase price paid last eyar) and €300K - the price I would pay in order to buy it this year.

Click to expand...

Are you happy that the house is worth 22.4% more than a year ago - even if it is your brother ? That seems like quite a hike ?

i think once you are putting your name on the deeds to a property stamp duty arises,the value for calculating the stamp duty will be the value of the house swopped for the other property,it doesnt matter that no or little cash changes hands as far as i know.

thanks for the clarification - so in other words, if I am swopping with another individual who is not related to me, I will pay exactly the same amount of stamp duty as if I were to purchase in the normal manner?