Buying out friend's interest in jointly owned property. Is stamp duty payable?

C

crow

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I bought a house with my friend in July 2003. We were both first time buyers, the house was second hand and we paid stamp duty on the property at the time. We are owner occupiers and have no interests in any other properties.

We are now going our seperate ways and my intention is to buy his share of the property.

The deeds to the property are in our joint names and of the course the bank has an interest as well.

Will stamp duty be payable on this transaction?

We have opinions from two solicitors - one says yes and the other says no. We also spoke with the revenue commissioners office and they gave a very vague answer which might suggest that duty will not be payable.

Any feedback would be greatly appreciated.

Thanks
 
As far as I know, stamp duty is payable once the title on the deeds of the properties is changing.
That would make sense though.
As in - a property transaction is taking place - you are buying half a property.
So presumably it would be owed.

I had a similar experience in the past - (however that time a name was being added to teh deeds as opposed to being deleted so it was not identical to your situation).

Stamp duty was owed that time.
 
I am almost sure this will be exempt from Stamp Duty. You bought half a house in 2003 and were a FTB. You are now buying the second half of the same house so you can still claim FTB relief.
The problem with a case like this is that it is quite rare therefore practitioners do not deal with it too often.
 
Hi looked into this myself year or so ago. A name coming off deeds does not generate stamp duty only a name going on. The conflict in opinion could be if you will need another party to finance the buyout, you would have to pay SD if their name was going onto the deeds. It is possible to do a deal with two names on mortgage and one on deeds. The stamp duty number for the revenue gave me this info at the time, maybe it has changed or maybe I just got lucky with who I got on the phone on the day :)
 
Thanks.

It's kind of looking like stamp duty will not be payable.

I don't need to involve another party to finance the buy out. The bank have agreed to continue the mortgage in my sole name. I reckon it's best to stay where I am for now rather than complicating matters further by transferring to a new lender for the sake of a marginally lower rate of interest. Do you agree?

We agreed the terms of the property transfer two years ago but we put the paperwork on hold becuase our mortgage was on a fixed rate at the time. That fixed rate expires shortly so we're getting down to the nitty gritty and that's where we might have another complication.

I paid my friend the agreed amount in January 2007. There was no formal agreement or contract - so technically speaking now - he has the money and he is also entitled to half the property. Wreckless but so far so good.

Will the revenue or the bank have issues with the fact that the money was paid eighteen months ago?

Our solicitors don't have the full story yet. We just want to know where we stand ourselves before we make a full disclosure.

Any ideas?
 
It's kind of looking like stamp duty will not be payable.

Not necessarily. When you bought you bought second hand so you did not get first time buyer relief as it did not apply to second hand property at that time.
If you had acquired a new property at that time you would have had FTB relief and if you were now buying an additional share in same house you could still have ftb relief. That is clear cut.

However as you did not/ could not have got ftb relief when you bought I am not at all sure that you can now. On balance I dont think so so stamp duty is payable. The reason I hesitate to be definite is that I am not currently doing any conveyancing and this situation simply would not have arisen when I last did do conveyancing( i.e before ftb relief was extended to all houses).

I don't need to involve another party to finance the buy out. The bank have agreed to continue the mortgage in my sole name. I reckon it's best to stay where I am for now rather than complicating matters further by transferring to a new lender for the sake of a marginally lower rate of interest. Do you agree?

We agreed the terms of the property transfer two years ago but we put the paperwork on hold becuase our mortgage was on a fixed rate at the time. That fixed rate expires shortly so we're getting down to the nitty gritty and that's where we might have another complication.

I paid my friend the agreed amount in January 2007. There was no formal agreement or contract - so technically speaking now - he has the money and he is also entitled to half the property. Wreckless but so far so good.

I know you dont want to hear this but god almighty that was a very foolish thing to do...even with a close friend..
was it framed as a loan from you to your pal by any chance to be repaid (as opposed to payment of money for his share)

Will the revenue or the bank have issues with the fact that the money was paid eighteen months ago?

Possibly the revenue:(

Our solicitors don't have the full story yet. We just want to know where we stand ourselves before we make a full disclosure.

You will have to tell them for good or bad...
 
You gotta tell your solicitor. They are on your side. You are not 'fessing up to something here, you are just telling them what happened - they aren't schoolmarms! They are by far the best equipped to advise you on your future course, even if it's to point you to a tax advisor on the matter. But your solicitor may well have an immediate answer for your query. At the moment, you're worrying about a relative unknown - have a chat with them and you'll feel better knowing the whole story.

Sprite
 
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The money was paid for his portion of the property - that was our understanding.

But - the situation might be less complicated if the money were a "loan". He could pay back the "loan" and then we could start the transfer process from scratch.

That would be one less complication.
 
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