Asked to delay closing until after budget

We signed contracts for sale of our house a couple of weeks ago and the purchaser had already signed previous to that. To my understanding, thats the deal done - just a matter of handing over money (from purchaser) and keys (to purchaser). We were meant to do that beginning of next week. Purchaser solicitor has asked that we 'delay closing' until after budget to determine if there are any other stamp duty benefits for his client. If this request entails just pushing handing of cheque /keys out by a few days, we have no issues. But is there some underlying thing in this request which will change the dates on the contract to after the budget? And if she decides then that she wants out, shes not bound by a contract?? I have to get back to my solicitor and will ask but just wonder if any one out there has any thoughts? Thanks..... P.S what dates the budget this year? 6th?

If you are potentially facilitating the vendor by delaying then surely you should be looking for some sort of incentive (not dependent on them benefiting from budget changes)?

Ana14 said:

P.S what dates the budget this year? 6th?

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First Wednesday in December so the 5th.

You may want to edit your post to avoid confusion as to who's who and whose solicitor is doing the asking. Vendor = seller, purchaser = buyer. Therefore, you are the vendor, and it's the purchaser's solicitor who is asking for the delay, if I'm reading your post correctly.

Just wanted to point this out to you early on in case you get confusing/conflicting replies.

Yes - I got confused and assumed that you were buying and not selling!

sorry - you're right. We are selling. Will amend for clarity......

does someone know something we don't about imminent Stamp duty changes?

Requests like this happen every year before a budget. Don't forget there is a difference between the date a contract is signed (both parties bound) and the closing date (exchange of money/keys).

As I understand it, contracts are signed. The purchasers have asked to delay the closing date, until after the budget. This means that if there are any favourable changes in the budget, they can avail of them. It doesn't mean that there is no contract in place.

I don't think it's anthing more sinister

surprised no-one has mentioned but any budget changes only kick in from January 1st - well at least PAYE tax changes follow this pattern so maybe you will be delayed until January if the purchaser has anything to gain by budget changes.

danFTB said:

surprised no-one has mentioned but any budget changes only kick in from January 1st - well at least PAYE tax changes follow this pattern so maybe you will be delayed until January if the purchaser has anything to gain by budget changes.

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If there were any stamp duty changes it would be market suicide to delay implementation as no business would be done to the set date, so I don't think this situation is likely

as an aside I thought that PAYE changes didn't kick in until the March after the budget?

Income tax changes normally take effect from 1 January. However, excise, stamp duty and VAT changes are sometimes implemented from budget day.

To ensure the sale goes thru you could agree that should any budget change result in them losing out had they held (in extra tax paid); you would compensate them up to a fixed amount.

Is it not just a matter of delaying your closing a day or two? As you said you were supposed to be closing beginning of next week and the budget is on the wed? It doesn't seem like an unreasonable request to me to even hold out until the end of the week. At least they put in the request. When I was closing on the sale of my apartment we were told 4 separate dates we were due to close and on each day it didn't happen due to the negligence of our purchaser and her solicitors. It was absolutely shocking. I would say that your purchaser sounds genuine. If contracts have been signed then should he/she pull out would they not stand to lose their 10% deposit?

IFT said:

To ensure the sale goes thru you could agree that should any budget change result in them losing out had they held (in extra tax paid); you would compensate them up to a fixed amount.

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Why would they do that when the contracts are already signed?

Friends of mine signed and closed a month before the last changes (i.e. a month before the date they were backdated to) and they still got their money back (FTb's) in stamp duty. The revenue had'nt processed it at that stage.

Looks like the purchasers are glad they delayed:

http://www.budget.gov.ie/2008/budgetsummary08.html#_Toc184545938





The current Stamp Duty system applicable to residential property is being reformed.
A simplified system, incorporating an exemption of €125,000 with 2 progressive rates instead of the existing 6 rate bands, is being introduced with immediate effect.
Transactions not exceeding the €125,000 exemption level will not be liable to Stamp Duty. For amounts above this €125,000 exemption level, but not exceeding €1 million, Stamp Duty will be charged at 7% on the excess over €125,000. Where the property exceeds €1 million, the part in excess of €1 million will be charged at 9% with the remainder between €125,000 and €1 million subject to a 7% charge.
In addition, properties with a value in excess of €125,000 but not exceeding €127,000 will not be liable for stamp duty.
This change will take effect in respect of instruments which are required to be presented to the Revenue Commissioners for stamping no later than 5 December 2007. Instruments which are executed in the 30 days prior to 5 December 2007 will therefore benefit from this change.
Current exemptions in relation to first time buyers and buyers of new homes will continue to apply.

Thanks for all the replies. Purchaser delighted with the news yesterday and we're all set to close tomorrow!! Happy on both sides......