Brother selling house to sister - stamp duty?

Hi,

i am selling a house i bought with my sister over 2 years ago. at the time we were both first time buyers, we paid €320k for the house and c.€14k stamp duty. the hosue is now valued at €450 and i am selling my share to my sister. i have heard conflicting views re stamp duty.

one view is that there is stamp duty payable on half the value of the house - ie. €225k and she receives a 50% reduction in stamp duty rate. therefore the stamp payable is €4,500. (€225k x 2%) - 2% being 50% of the 4% payable for Other Owner Occupiers.

another view is that as neither of us bought any property in the meantime she would still be considered a 'first time buyer' and could avail of the €317.5k first time buyer exemption - and therefore not be liable to any stamp duty.

is anyone able to set me straight?

kkboy

From Revenue.ie stamp duty Q&A:


What is the position where a person, who had obtained first time buyer relief on the joint purchase of a house with another first time buyer, subsequently acquires the other joint owners interest in the house?
A person who obtained first time buyer relief on the purchase of an interest in a house would not be precluded from obtaining first time buyer relief on a subsequent purchase of another interest in the same house provided that person has not purchased another house or part of another house in the intervening period.
The question that I would think you would need revenue clarification on is whether or not you should be paying stamp duty on 225,000 at half (due to consanguinuity relief) of the RATE that applies to a FTB of 450,000 (6%) or whether the purchase is exempt as it would be for a FTB purchasing for less than the 317.5 ceiling?

thanks,
i've thought about that but the way i look at it is that there would be a double hit on stamp duty for the same property for the same person. essentially my sister paid stamp duty on half of her share of the original purchase price of €160k (50% of €320). if she was to be charged on the full €450k wouldn't she be paying stamp duty on the same portion of the same property twice?

I know the amount she's paying will be based on a purchase of 225,000, but I think it is possible that the RATE that she pays is based on the total value of the house, 450,000.

FTB rate for 450,000 = 6%
50% of this rate due to consanguinuity = 3%

3% of 225,000 = 6,750

This would mean that she pays the same total stamp duty as if she bought the whole house herself as a FTB, except that she's paying it in two halves. Logically this would make sense, as otherwise people could break a transaction down into incremental purchases of under 100k purely to avoid SD.

Obviously, you should get revenue clarification / profesional advice on this.

Focus on what she is buying:

She owns half the house. She is buying out the other half. The value is 225,000.00. The rate is for ftb's and as it is under 317.5, she is exempt. The Deed will have to be adjudicated because its between related parties.

Is there a mortgage and is she taking over full reponsibility for it? If yes, then the value of what she is buying is reduced by level of debt attaching.

"Logically this would make sense, as otherwise people could break a transaction down into incremental purchases of under 100k purely to avoid SD."

No, thats not possible because the Revenue Certificates specifically refer to whether there is a series of transactions involved. Also, most people are borrowing to buy so the lender will not allow that sort of thing.

mf

thanks for that -
there is a mortgage in place but it's in both our names - she's applying for a new mortgage to cancel the old one and have some equity to buy me out.
i dont get your point re the value of what she is taking over being reduced by the debt attached - is this the case if she re-mortgages?