Considering buying my son's hse & renting it- is it a good idea? Stamp Duty rate?

BobMax

Registered User
Messages
43
My son is buying a bigger house.
I am considering buying the present one from him and renting it.
The amount involved is €350,000, is the Stamp Duty 6%??
Is it a good idea to buy it to rent at the present time??
 
Hi Bobmax

Depends on the area, check out the daft website ...www.daft.ie see what is the maxium rent in your area for the same size house. I do private lettings for my clients and ,over the last few weeks ,the amount of people looking to rent is incredible and the rents are up from last year by 10%.

p.s

pay 317,500 and no stamp required......the balance paid by using your imagination
 
"The amount involved is €350,000, is the Stamp Duty 6%??"

Stamp duty will be 3% - you pay at half the normal rate where its between related parties.

"pay 317,500 and no stamp required......the balance paid by using your imagination"

At 317.5 for an investor the stamp duty rate is 5%.

If you are suggesting paying a proportion of the price under the table, this debate has been done to death on AAM. Stamp duty is paid on the market value of the property. Market value is what a willing purchaser would pay - it is not what the parties choose to call it. Revenue are very well aware that there is a culture out there of people who think that no-one will ever know if they pay cash under the table. Several areas it falls down:

1. Where purchaser is getting a mortgage, it will be based on a percentage of the contract price. Try explaining to your lender that you want them to participate in a fraud on Revenue by lending them a percentage of under the table funds. I don't think so.
2. Where vendor needs the whole proceeds to purchase again. Explain to Revenue where extra funds came from.
3. Purchaser will, when they ultimately sell, pay more CGT.
4. Honour amongst thieves. If this is all done under the table, then the Vendor has no recourse in law if the purchaser fails to pay the balance. Unlikely in thsi case perhaps but who knows?

mf
 
Stamp duty will be 3% - you pay at half the normal rate where its between related parties.
mf1 - is this still the case where the purchase is explicitly for investment purposes, as here? If so, it would appear to be a strange loophole in the usual requirement that investors pay the full level of chargeable stamp duty.
 
is this still the case where the purchase is explicitly for investment purposes, as here?

Yes - it is. I assume Revenue take the view that its a transfer of assets between family members and therefore allowable.

mf