I would appreciate the opinions of anyone with similar experience to my situation:
Three years ago I purchased a house with a friend purely to enable her to get the mortgage (which she wouldn't have got based on her own income). At the time I owned my own PPR and have continued to own it and live there. We went joint on title, joint on mortgage for her new house.
The time has now come when she will "buy me out" and take over the mortgage and full ownership of the house. I am not making any profit from this. I over the years I did put about €6k towards the purchase but this was by way of an interest free loan which she will repay whenever she can.
We want to do everything "by the book" but I'm having a hard time finding out exactly what taxes are due. I have received conflicting advice but here is how I see it:
Capital Gains Tax
When she "buys me out" even though I will make no profit I am due to pay CGT on the "deemed gain", i.e. the gain (profit) I would make if she bought me out at the current market price.
Stamp Duty
My friend who is already a property owner (i.e. she already owns her half of the house, her PPR) therefore she will be due to pay Stamp Duty on her purchase of the other half of the house.
Stamp Duty on the original purchase.
I was told at the time of the original purchase that no stamp duty was payable. The house was new and qualified as "no stamp duty for owner occupiers" (which my friend occupied). It could be viewed that because i purchased a share of the house with her, my part of the house was an investment and therefore stamp duty was due at the investor rate on my share. The information i received from Revenue at the time was that if one of us lived in the house (i.e. it was my friend's PPR) and it was not rented out (which it never was) then no stamp duty was due. Does this sound correct?
Capital Acquisitions Tax
This is something I just came across when searching on the net for CGT. Would my friend be due to pay CAT on buying me out as she is not going to pay me the full market price for my share of the property?
I would appreciate anyone with similar experience of the above sharing their thoughts. I guess buying with a friend to help them get the mortgage is not as common as perhaps parents jointly buying a house with an adult child to enable them to make the purchase but the tax issues might be similar. We want to do everything correctly here. Thanks in advance for your input.
Three years ago I purchased a house with a friend purely to enable her to get the mortgage (which she wouldn't have got based on her own income). At the time I owned my own PPR and have continued to own it and live there. We went joint on title, joint on mortgage for her new house.
The time has now come when she will "buy me out" and take over the mortgage and full ownership of the house. I am not making any profit from this. I over the years I did put about €6k towards the purchase but this was by way of an interest free loan which she will repay whenever she can.
We want to do everything "by the book" but I'm having a hard time finding out exactly what taxes are due. I have received conflicting advice but here is how I see it:
Capital Gains Tax
When she "buys me out" even though I will make no profit I am due to pay CGT on the "deemed gain", i.e. the gain (profit) I would make if she bought me out at the current market price.
Stamp Duty
My friend who is already a property owner (i.e. she already owns her half of the house, her PPR) therefore she will be due to pay Stamp Duty on her purchase of the other half of the house.
Stamp Duty on the original purchase.
I was told at the time of the original purchase that no stamp duty was payable. The house was new and qualified as "no stamp duty for owner occupiers" (which my friend occupied). It could be viewed that because i purchased a share of the house with her, my part of the house was an investment and therefore stamp duty was due at the investor rate on my share. The information i received from Revenue at the time was that if one of us lived in the house (i.e. it was my friend's PPR) and it was not rented out (which it never was) then no stamp duty was due. Does this sound correct?
Capital Acquisitions Tax
This is something I just came across when searching on the net for CGT. Would my friend be due to pay CAT on buying me out as she is not going to pay me the full market price for my share of the property?
I would appreciate anyone with similar experience of the above sharing their thoughts. I guess buying with a friend to help them get the mortgage is not as common as perhaps parents jointly buying a house with an adult child to enable them to make the purchase but the tax issues might be similar. We want to do everything correctly here. Thanks in advance for your input.