Building a house - Stamp Duty payable ?

T

Taliesen

Registered User
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Hi,

My wife and I are being given a site by parents on which to build a house.
We already bought one a couple of years ago so are no longer first-time buyers.

My question is in semantics I suppose. As we are not 'buying' a home, or transferring ownership of a home, does stamp duty apply ?

Also, as the transfer of ownership of the site hasn't happened officially yet, what are the tax implications of it? I would estimate it's value to be approx 40k (maybe less in current climate) but no other gifts have been received. What is the gift threshold from parents -> children and does this apply to 'gifts' such as land/property or is it cash only ?
 
2 taxes involved here - stamp duty and, potentially, Capital Acquisitions Tax on the market value of the site.

The site should be formally transferred and details of that registered. The transfer is effective on execution of the deed on an agreed closing date when ownership is to pass. Stamp duty is payable on the deed - on 40K, the rate is 4%. 40K for any site sounds very low - you should make sure you have a formal valuation from a reputable auctioneer to show Revenue if they query it.

If the site is transferred only into the child of the parents transferring ( as opposed into the names of the child plus the spouse) stamp duty will be half the normal rate. However, if you subsequently plan/expect to obtain a mortgage, your then lender may want the property in both names.

There may be a possibility of a site transfer exemption from stamp duty - check revenue website.

The CAT threshold for family is quite high ( about 600K?) so unless there have been very substantial gifts/inheritances, on a transfer from parent to child, it is unlikely that CAT will arise. However, if transfer is to both child and spouse, CAT may apply as rates between non blood related parties have a lower threshold.

And you should take proper legal advice, obviously.

mf
 
Thank you MF. That's much appreciated.

What do you know about the Stamp Duty issue on building a house, as opposed to purchasing one ?
 
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