Delay closing date to wait for budget?

"The Vendor's solicitor holds onto both copies of the contracts until closing date when you hand over the cheque and get your copy of the contract (signed by you and them) which makes it all legal."

This would be highly unusual.

In general there are three phases to the sale/purchase process.

1. Booking deposit and price agreed. Non binding situation. Nothing signed. Both sides can walk away.

2. Contracts signed by both parties, exchanged ( each side now has one signed by both) and deposit (10% or less if agreed) paid. Contracts stipulate property, price and closing date. The deal is now binding. Closing date is normally some weeks ahead.

3. Closing date. Purchaser hands over money. Vendor hands over keys, title deeds, vacant possession. This is completion/closing date. This is the date in my view from which the stamp duty period ( 30 days ) runs.

So if there is any change in the Budget how does that impact on a purchaser? My view is that stamp duty is payable on the DEAL/PRICE as at the closing date BUT Revenue have allowed in the past stamp duty to be assessed as at contract date (earlier) if that is more favourable to the purchaser. Most of my closings ( I'm selling in each case) are being pushed back to Budget in the hope that there will be a favourable change.

No-one can predict what will happen so anything done is on a risk assessment basis.

mf

I think it makes little sense to wait until the budget to see if the SD rates are changed. All that will happen is that vendors will adjust their prices accordingly on the day.

If, for example, SD is abolished (which WILL NOT happen) then any vendor in the process of sellling a house for 500K will immediately instruct their solictor to bolt on 7.5% of the price knowing full well that the purchaser has already budgeted for this money.

If anything it makes much more sense to close BEFORE the budget.

Surely if the contracts are signed though you can't change the price? When we signed our contracts (last week) the price was on it, if we were to change the price before closing (on the 8th December) would we not have to have new contracts?

mf1 - We are not paying a deposit which is your second point, that is why contracts have not been exchanged. Vendors are happy to get the 100% cheque on closing date.

This does give the vendor the option of pulling out of the sale before closing date but we're not worried about that happening, if it did we wouldn't be too bothered. In our favour it means we are not paying interest on the 10% deposit before closing date.

Mayway - I can't make any sense from your argument, perhaps I've completely missed your points!

- If contracts have been exchanged with a deposit paid, prices cannot be changed by the vendor regardless of the outcome of the budget.

- I don't think anybody on AAM expects SD to be abolished, this is not the point. What buyers are waiting for is to see if the SD format will be changed. If the minimum threshold is increased from €317.5k, many FTBs may not have to pay SD at 3%, saving them a mimimum of €10k. The other possibility is that a tiered system may be brought in to only pay SD on anything above the minimum threshold.

Its very possible that neither of these things will happen but it has to be worth delaying a closing date for a couple of weeks and possibly save €10k cash??

My apologies for not being clearer.

Obviously if the contracts are signed then the price cannot be altered. The point I was trying to make was that I don't think that it would be a good idea to wait until the budget to sign contracts because if the SD rates get modified in some way so that SD payable is less then the vendor will just insist on the price being adjusted to compensate.

Not only that but I suspect that there are a lot of purchasers out there waiting for the budget before making a move so there should be an increase in activity in January which should drive prices up a slight percentage relatively quickly at that time. So, I would sign the contracts prior to the budget.

Cheers, mw

I see Bertie has brought the subject up again last nite suggesting something will be done, but when is another question. I bet for the budget as they will fear a backlash and a xmas present for the opposition if they do nothing now

We closing for an investment property tommorow , 162k , does anyone believe there will be a change for investors or just the private market.

Further lack of comment from Mr Cowen here
http://www.unison.ie/breakingnews/index.php3?ca=39&si=102119

"What we really need to keep an eye on here is to make sure that we avoid inflationary effects and make sure that, if any help can be provided, that it's provided for the purchasers exclusively" An extract from the interview with Cowen from the last post..

Its looking more and more like there will not be any change to SD but maybe an increase in TRS for FTBs??