Avoiding Stamp Duty?

B

BPF

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Hi... im hoping to buy a house with my girlfriend soon. She bought an apartment with her sister 4 years ago. I am a first time buyer. However we are applying for a joint mortgage. Im looking for advice on how to approach it so that we will not have to pay stamp duty if we decide to buy a second hand home. Any help greatly appreciated. Thanks.
 
There is no way you can avoid stamp duty if your girlfriend has already purchased an apartment.

I'm not sure 100% how it works but i would imagine you would only need to pay half the stamp duty. Either way you will need to pay something.

The only way not to have to pay the stamp duty if for you to purchase the house yourself, and then at a later date put your girlfriend on the deeds.
 
If you are buying the house together, and you are a first-time buyer and your girlfriend is not, then if you buy a second-hand house you are liable for stamp duty (no reductions). It doesn't matter to Revenue that you are a first-time buyer. You yourself will get TRS as a first-time buyer though.
 
what do you mean mathepac?

When i said a later date it was because i thought it would be something similar to renting out a house you have to wait the 2 years. Would the same not apply?

Am i wrong, can you not do this?

Sorry for the wrong information i wasn't aware of this at all. I thought it would be a legal way of getting around the stamp duty.
 
If you buy a new build below a certain size (around 125sqm I think) to use as your PPR you don't have to pay stamp duty AFAIK. Second hand properties don't have the same tax break.
 
samanthajane said:
... Am i wrong, can you not do this? ...
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Essentially people can do whatever they like with property, but as boyfriend and girlfriend the "... put your girlfriend on the deeds ..." scenario has other potential tax consequences i.e. CAT as the transaction could be construed as a gift.
 
thanks for all the replies....just to give you more of an insight we are going to need a mortgage for around 400k....id never get this if i applied on my own. Is it possible to get a joint mortgage and then put the house in my name. Then down the road....if we get married the house will then be in both of our names automatically??
 
BPF said:
Is it possible to get a joint mortgage and then put the house in my name. Then down the road....if we get married the house will then be in both of our names automatically??
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No you cant get the mortgage together and only put yourself on the deeds.

The house wouldn't automatically be in both your names it would still be only in yours untill you put your gf/wife on the deeds.
 
I stand corrected. I didn't think that was possible or legal.

What the point of getting the tax office to stamp the forms saying that you have never purchased a house before, if you can get around it that way?
 
samanthajane said:
I stand corrected. I didn't think that was possible or legal.
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Just because it's possible doesn't mean it's legal. The solicitor really should not have facilitated this arrangment.

from revenue.ie

To qualify for the relief the entirety of the purchase monies, including any borrowings, must be provided by the first time buyer. Any person, who provides part of the purchase monies or who is a party to any borrowings relating to such purchase, is also regarded as a buyer of the house and the relief will not be available unless that other person is also a first time buyer.
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Solicitors should not get involved in this type of transaction and nor should (a) the purchasers and (b) the lending institution. Too often the lengths people would go to evade ( not avoid but evade) their tax liabilities would put pressure on everyone involved. A huge problem with all of this is that Revenue can still come calling and solicitors , as well as the purchasers, can find themselves embroiled in Revenue audits.

Revenue have tightened up dramatically and it may be that GFs friends did this before Revenues most recent stringent guidelines. I doubt if, on audit, it would stand up to any scrutiny.

So, the big question is should the people who did evade their taxes make a voluntary admission to Revenue?

mf

FTB relief is just that - it is for FTB's and FTB's alone. End of story.
 
mf1 said:
Solicitors should not get involved in this type of transaction and nor should (a) the purchasers and (b) the lending institution. Too often the lengths people would go to evade ( not avoid but evade) their tax liabilities would put pressure on everyone involved. A huge problem with all of this is that Revenue can still come calling and solicitors , as well as the purchasers, can find themselves embroiled in Revenue audits.
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Reality is that they have and they do.

Im one of those people, Im not on the deeds but am on the mortgage. What our solicitor told us was as follows:

- We could do it, its not technically illegal but the following applied:
* I had to sign a seperate form from the bank confirming i understood the implications of being on the mortgage but not on the house deeds.
* the solicitor advised that I couldnt claim any tax relief.
* Im not an owner of the house. My other half owns the house and i contribute to the running of the house. My partner owns the house.
* in the event we ever split/fall out, neither of us could take a case to court to stake any claim on the courts otherwise I would be liable for paying the stamp duty and my other half would be liable for aiding tax evasion or something along those lines.
* if i want to go on the deeds at a later stage, usual stamp duty rules apply.

The solicitor explained why this kind of practise was being allowed but to be honest, i wasnt really listening. I was too concerned with how debt I was in with nothing to show for it!! :(
 
cactusman said:
Reality is that they have and they do.

Im one of those people, Im not on the deeds but am on the mortgage. What our solicitor told us was as follows:

- We could do it, its not technically illegal but the following applied:
* I had to sign a seperate form from the bank confirming i understood the implications of being on the mortgage but not on the house deeds.
* the solicitor advised that I couldnt claim any tax relief.
* Im not an owner of the house. My other half owns the house and i contribute to the running of the house. My partner owns the house.
* in the event we ever split/fall out, neither of us could take a case to court to stake any claim on the courts otherwise I would be liable for paying the stamp duty and my other half would be liable for aiding tax evasion or something along those lines.
* if i want to go on the deeds at a later stage, usual stamp duty rules apply.

The solicitor explained why this kind of practise was being allowed but to be honest, i wasnt really listening. I was too concerned with how debt I was in with nothing to show for it!! :(
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Sounds precarious to me, sorry. To answer the OPs question simply, there is no way of doing this (other than tying yourself into the type of legal knots that may come back and bite you).
 
Why not look around at new houses, 400k is a good budget to be looking around with and you will find that it is easier to negotiate down a builder than an individual seller. You would save yourself 20k in stamp duty, avoid a chain, and allow for a bigger saving. The size to avoid stamp duty is not held to 125sqm, so if you are after a big house this is possible for that budget.
 
OP has stated that they cannot afford the house without both contributing. Then just reduce the amount you are willing to pay for a property to factor in the stamp duty cost.

Girlf's scenario is to me a clear case of tax evasion, I have no problem with people avoiding tax. In this case the house in in one name but the other has a separate legal document stating they are an owner and is making repayments on the mortgage. I would be seriously worried about revenue having a look back at this.

Some people are wealthy enough to have both the depost and the means to repay on their own etc and that is perfectly legitimate.

Cactusman's phrase not technically illegal, what does this mean, either it's legal or it isn't. Also being on the mortgage, aren't you making repayments and this gives you property rights. I consider this a right mess.
 
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