# Stamp Duty on a house is liable from when ?



## Jonathan (12 Nov 2006)

I have heard that there is a 30 day period of grace between purchasing a house and paying the stamp duty (assuming you are liable for stamp duty). If a house is purchased on the 7th of November 2006 (loan cheque cashed by the other side), and if 30 days later stamp duty is reduced in the 2007 budget (6th of December), will the new reduced rates of stamp duty in the 2007 apply to the house purchased 30 days previously, or which date is important: a]exchange of contract date, b]closing date and cashing of cheque by vendor, c] date the solicitor puts on the deed of transfer, assuming the solicitor can do this up to the 30 days beyond the sale.


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## ClubMan (12 Nov 2006)

As far as I know your solicitor will normally require the _SD _on closing and will remit it to _Revenue _withing c. 30 days.


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## podgerodge (13 Nov 2006)

I have the same issue, my solicitor is saying it is probably when I signed the contracts (regardless of the vendor signing) as I was "prepared to pay the stamp duty at that time"  which makes no sense to me as theoretically I could ask him to scrap those contracts and get them re-done.

I can't find the answer on revenue.ie.  

When is "closing" - they can't go on the "date you get the keys"!  Unless they simply follow the closing date mentioned in the contracts - which may not be actually adhered to....


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## panindub (13 Nov 2006)

I too am in the same situation, and solicitor didn't know for sure either!
Love to hear the answer to this one, anybody?


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## sulo (13 Nov 2006)

This is the advice I received from my bank, at the time we were "buying" our home! 

From the cheque issue date you will then have 30 days to come up with the remainder required to pay the Stamp duty in full.


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## podgerodge (13 Nov 2006)

so you maintain that the date the mortgage cheque is issued is the valid date for which rate of stamp duty will apply? (assuming the rate changes!)

I doubt it!


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## mf1 (13 Nov 2006)

When is stamp duty payable? 

Up to 30 days after completion. date

When is completion date? 

The date there is a formal handing over of funds for keys and vacant possession. 
That date ties in to searches date. 

If a house is  bought on 7/11, the stamp duty regime as at that date is the applicable rate. If the rate changes in the budget, it does not change the date that the deal was completed. 

Which if these dates is relevant? 

a] exchange of contract date, - there is an argument that this is the day the formal deal was agreed although not yet completed. 

b] closing date, - my view the correct date to be used for stamp duty purposes
and cashing of cheque by vendor- irrelevant

c] date the solicitor puts on the deed of transfer, assuming the solicitor can do this up to the 30 days beyond the sale.
The date of the deed is the date of closing/completion. It’s not an arbitrary date that the solicitor should decide. Does it ever happen that the date is different? Yes, but its preferable that it is one clear day.  

The solicitor does require the stamp duty on closing – if there is a mortgage the lender requires the solicitor to be in funds to stamp and register the deed before releasing the loan cheque. Clients often forget about the stamp duty as soon as they move in and it can be a nightmare trying to force the stamp duty out of them. So you don’t – you get it in advance. 

“From the cheque issue date you will then have 30 days to come up with the remainder required to pay the Stamp duty in full. “ 

In fuzzy theory yes- in practice no. The solicitor cannot release the loan cheque until they are in funds as above. 

The date the mortgage cheque is issued is the valid date for which rate of stamp duty will apply?

The date of the issue of the mortgage cheque has diddly squat to do with stamp duty. Loan cheques can issue several weeks in advance of closing. 

mf


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## podgerodge (13 Nov 2006)

Thanks for that mf.  Sigh!



mf1 said:


> a] exchange of contract date, - there is an argument that this is the day the formal deal was agreed although not yet completed.



That would be extremely unfair if a delay in closing of a few months took place!



According to a revenue webpage I was looking at the wording was as follows when changes were introduced for first time buyers a couple of years ago:

"The rates of duty for first time buyers have been reduced for deeds of conveyance or transfer executed on or after"

So when is a deed executed?


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## sulo (13 Nov 2006)

podgerodge said:


> so you maintain that the date the mortgage cheque is issued is the valid date for which rate of stamp duty will apply? (assuming the rate changes!)
> 
> I doubt it!


 
As you will see from my post, it was what PTSB told me, I went to the trouble of siefting throw my emails from them to find that information for you - ungrateful sod.  I am not an expert.  Just posting on information I received.


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## podgerodge (13 Nov 2006)

sulo said:


> As you will see from my post, it was what PTSB told me, I went to the trouble of siefting throw my emails from them to find that information for you - ungrateful sod.  I am not an expert.  Just posting on information I received.




Relax Sulo, you are completely misunderstanding me.  My "I doubt it!" was merely a way of saying "No such luck"!


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## sulo (13 Nov 2006)

podgerodge said:


> Relax Sulo, you are completely misunderstanding me. My "I doubt it!" was merely a way of saying "No such luck"!


 
Absolutely relaxed, but u are right, it was a misunderstanding of "tone" - very hard to detect that from static text! 

Btw, went to see the real "podge and rodge" last night! Excellent, ripping the proverbial out of "Chris BROSNAN"s celebrity, drugs, and women !!!


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## mf1 (13 Nov 2006)

So when is a deed executed?

b] closing date, - my view the correct date to be used for stamp duty purposes

The date that is on the deed. 

My own view? The paperwork all ties in. The date on the deed should be the date that funds are exchanged for title and vacant possession which should be the date to which searches are done which should be the date that goes on the mortgage. 

The mortgage deed may have been signed by the purchaser months in advance. The Deed may be signed a few days or weeks  after closing but the date of the Deed  should be as above. And that is the date of execution. 

mf


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## podgerodge (13 Nov 2006)

I agree but...

If the closing date - the date on the deed , turns out not to be the actual closing date - which ends up being a month later, could this be successfully argued?

actually another revenue page states "This means the date on which the deed takes effect and is normally
the date on the deed"

Normally...hmmmmmm


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## mf1 (13 Nov 2006)

"If the closing date - the date on the deed , turns out not to be the actual closing date - which ends up being a month later, could this be successfully argued?"

Of course. Be careful not to confuse closing date in contract with actual closing date - the date of the deed. 

Its not the nominated closing date in the Contract ( which is mostly aspirational anyway) - its the actual closing date. The day the vendor must have vacated, the day the money changes hands, the day the purchaser is actually entitled to take possession. That is the closing date, that is the date the deed should be dated. And that is the date from which the 30 day grace period for stamp duty is calculated. 

mf


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## podgerodge (13 Nov 2006)

Thanks mf1 

I hope you are correct!

Pity everything on revenue is a little vague!

As 1st december is currently my 'closing date' I take it I should delay paying and taking the keys for another week after that and see what happens!


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## mf1 (13 Nov 2006)

I think a lot of current purchasers are hoping to delay a closing until December 8th to see what happens, in the hope that there will be a reduction in stamp duty. 

And if there is an increase in stamp duty on the day..............

I'm only askin' 

mf


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## podgerodge (13 Nov 2006)




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## Vanilla (14 Nov 2006)

> As 1st december is currently my 'closing date' I take it I should delay paying and taking the keys for another week after that and see what happens!


 
I don't understand why you would when the _*regime *_applicable is dictated by the date of the contracts, although the stamp duty is not due until 30 days after closing.


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## mf1 (14 Nov 2006)

Hi Vanilla - I know you posted before about the applicable date for stamp duty regime when there is a change in the regime. I understood that you had had very specific dealings on the point. 

I've always worked on the basis of stamp duty regime applicable as at date of completion and have had  deeds etc. stamped on that basis. Did Revenue point you towards any specific provisions in the legislation ref. contract date being applicable?

I'm very interested because even though I don't think there will be a change on December 8th I'd like to get a (the?) definitive answer on relevant date. 

mf


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## podgerodge (14 Nov 2006)

Only based on what mf1 thinks



mf1 said:


> .
> 
> b] closing date, - my view the correct date to be used for stamp duty purposes
> and cashing of cheque by vendor- irrelevant
> ...




and what I read on the revenue website saying that stamp duty is payable based on "the date on which the deed takes effect" - not the contracts.


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## Vanilla (14 Nov 2006)

I was trying to recall what year it was that this particular point became of huge importance in a development I was doing and I looked up some old stamp duty documents I keep- interestingly I came across a leaflet that I had earmarked from the Revenue about changes to stamp duty in 2000- the Revenue had issued a guideline on transitional arrangements saying that if as a result of changes to stamp duty you were disadvantaged by the changes and you had a contract executed prior to the changes you could avail of the old regime by simply putting a finance cert in the deed stating that the contract was executed prior to the change. Which is a long winded way of saying that at THAT time you could choose which regime was most advantageous to you- so perhaps the same will happen again. Or at least certainly I 'll be arguing that point if necessary. Which is good news all round.


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## Sar (14 Nov 2006)

Our solicitor (who is a relation of mine) advised us that it is the date on the contract that is applicable for stamp duty. On this basis we have arranged to sign contracts on 8th Dec and close on 14th.


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## podgerodge (14 Nov 2006)

Rang the Stamp Duty section of Revenue

They say it's "up to Finance" whether the contract date or deed execution date is the applicable date..and that this can change from budget to budget .. dunno if this is true or not I would have thought it was always one or the other


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## podgerodge (14 Nov 2006)

Edit:  From the Revenue Budget 2005 guide at [broken link removed]

"The revised stamp duty rates, which will apply to instruments (e.g. deeds of conveyance or transfer or leases) executed on or after 2 December 2004, are set out in the table below...

"Contracts -Where a contract has been entered into prior to 2 December 2004 the new rates will apply provided the instrument (e.g. deed of conveyance or transfer or lease) giving effect to the contract is executed on or after 2 December 2004."

I think the above sentence in relation to contracts solves this whole question - if it applies to any 2006 changes.  Am I correct?


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## happypat (15 Nov 2006)

podgerodge said:


> Edit: From the Revenue Budget 2005 guide at [broken link removed]
> 
> "The revised stamp duty rates, which will apply to instruments (e.g. deeds of conveyance or transfer or leases) executed on or after 2 December 2004, are set out in the table below...
> 
> ...


 

Does this mean people are ok if they wait until after the budget to close?


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## newkid30 (16 Nov 2006)

Do people still think stamp duty is still going to be abloished?
Just curious?


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## podgerodge (16 Nov 2006)

newkid30 said:


> Do people still think stamp duty is still going to be abloished?
> Just curious?


No. This discussion is about if there were changes to it what date would apply.




			
				happypat said:
			
		

> Does this mean people are ok if they wait until after the budget to close?



I was hoping mf1 or vanilla would answer this!


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## Vanilla (16 Nov 2006)

Can't podgerodge, as we don't know. If there are changes, the Revenue might announce transitional arrangements as they have done in the past, or they might not say anything at all. If they don't say anything at all I  imagine it's up to each individual to argue their case. Certainly I will be arguing the case for any of my clients to be affected.


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## podgerodge (16 Nov 2006)

Hi Vanilla
I was just wondering though, based on the 2005 document, is it open and closed that the deed date is the relevant date?


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## Vanilla (16 Nov 2006)

Not necessarily since in 2000, the transitional arrangements were exactly the opposite- i.e that if the contract was executed prior to the change you could rely on the old regime rather than the new. Although at that time you could choose to take the new regime if it were more advantageous to you. 

So it follows that the Revenue could issue transitional arrangements that could go either way.

Don't forget that not all changes are advantageous either- the rates could go up! Or certain reliefs could be abolished.


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## techman (20 Nov 2006)

Called Stamp Office.

Date on the deed is used for SD calculation.


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