First Time Buyer - house in US

Hi,

I am an Irish citizen living in the US. I want to buy a house in Ireland in my name for my mother to live in. I read that you're not eligible as a FTB if you have ever owned a house abroad. Is this true and how enforceable is it?

Thanks.

shambo said:

Hi,

I am an Irish citizen living in the US. I want to buy a house in Ireland in my name for my mother to live in. I read that you're not eligible as a FTB if you have ever owned a house abroad. Is this true and how enforceable is it?

Thanks.

Click to expand...

First-time buyers

A first-time buyer is defined as a person (or where there is more than one buyer, each person):

• Who has not on any previous occasion, either individually or jointly, purchased or built on his/her own behalf a house in Ireland or abroad;
• Where the property purchased is occupied by the purchaser or a person on his/her behalf as his/her only or principal place of residence and
• Where no rent is derived from the property for five years after completion of the current purchase.*

*If the first-time buyer rents the house within five years Revenue will claim back or 'clawback' the difference between the higher stamp duty rates and the duty actually paid. The only exception to this is the 'Rent a Room' scheme where part of the house is rented out. If the house is sold within five years there is no clawback.

A divorced or separated person is considered a first-time buyer in the following circumstances:

• if they have left their former marital home and,
• do not retain any interest in the martial home and,
• their former spouse continues to occupy the home.

The Revenue Commissioners have published with frequently asked questions (FAQs) on first-time buyers and stamp duty.

Thanks for the answer. But what I'm really asking is how enforceable is it?

Th responsibility for payment of Stamp Duty (or not) falls to your solicitor. I can't imagine too many solicitors wanting to facilitate tax evasion.

second LDferguson,


few solicitors are going to facilitate tax evasion...

The responsibility for payment of Stamp Duty (or not) falls to your solicitor.

Actually, that responsiblity lies with the tax payer but once a solicitor becomes aware we have a secondary liability to Revenue so we don't go there.

mf

JHegerty

claim back or 'clawback' the difference between the higher stamp duty rates and the duty actually paid.

Click to expand...

Can you explain this a bit better, please?

If you had paid stamp duty, what would the higher stamp duty rates be?

Cheers

Investors generally pay higher SD rates than owner occupiers. When the clawback kicks in then the property owner is liable for the difference between what s/he paid and what an investor would have paid at the time of purchase for the same property. This is an all or nothing liability - i.e. is it not calculated pro rata over the five years. Does that make sense to you?

Shambo, if you buy a new house for your mother to live in you will probably be able to avoid stamp duty. You will be entitled to the owner-occupier rate on the basis that your mother is to occupy the property as her principal place of residence "in right of the purchaser", provided you derive no rent from the property for 5 years.

MF1, on the technical position, the sole responsibility for paying stamp duty rests with the purchaser / transferree, unless there is a gift in which case both transferor and transferee are accountable persons. There is no concept of secondary liability in stamp duty legislation.

For the purposes of clarifying where the solicitors possible liability arises............

I quote Section 8(1) Stamp Duties Consolidation Act 1999.


8.— (1) Except as provided for in this section, all the facts and circumstances affecting the liability of any instrument to duty, or the amount of the duty with which any instrument is chargeable, are to be fully and truly set forth in the instrument.

(2) Where it is not practicable to set out all the facts and circumstances, to which subsection (1) refers, in an instrument, additional facts and circumstances which—

(a) affect the liability of such instrument to duty,

(b) affect the amount of the duty with which such instrument is chargeable, or

(c) may be required from time to time by the Commissioners,

are to be fully and truly set forth in a statement which shall be delivered to the Commissioners together with such instrument and the form of any such statement may from time to time be prescribed by the Commissioners.

(3) Any person who—

(a) fraudulently or negligently executes any instrument, or

(b) being employed or concerned in or about the preparation of any instrument, fraudulently or negligently prepares any such instrument,

in which all the facts and circumstances affecting the liability of such instrument to duty, or the amount of the duty with which such instrument is chargeable, are not fully and truly set forth in the instrument or in any statement to which subsection (2) relates, shall incur a penalty of—

(i) £1,000, and

(ii) the amount, or in the case of fraud, twice the amount, of the difference between—

(I) the amount of duty payable in respect of the instrument based on the facts and circumstances set forth and delivered, and
(II) the amount of duty which would have been the amount so payable if the instrument and any accompanying statement had fully and truly set forth all the facts and circumstances referred to in subsections (1) and (2).


mf

MF1, at the risk of being accused of nit-picking, what you have just copied there relates to penalties for fraudulently or negligently preparing an instrument. A solicitor may indeed become liable to such penalties. A solicitor will never, however, be an accountable person in respect of their client's stamp duty liability (and note that the stamp duty liability is a totally separate issue from the issue of penalties for fraud or negligence) on an instrument as the transferee is singularly responsible for this, there is no secondary accountability.

Obviously if a solicitor collects stamp duty from a client and doesn't pay it to Revenue or fails to advise a client of a stamp duty liability the client should be able to sue the solicitor, but this is not something legislated for in stamp duty law.

This is not a tax expert forum - its a general consumer orientated board.
This arose in a general context - it got a general response.
You can nitpick as much as you like.
mf

I was going to let this one go and I'm sure I will be chastised by the AAM police for not letting it go, but:

This may not be a tax / legal / etc expert forum but most of the people responding to the tax / legal queries are tax practitioners or solicitors like you and me who consider ourselves to have some knowledge in the area. Just because someone has a general query, that does not mean that the answers that those of us who think we know what we are talking about give should be half-baked. You were quite happy to go all tax / legal technical and copy an out of date version of the stamp duty legislation onto the website to support your incorrect assertion. Now that you realise you were incorrect you try to turn the tables on me by saying general queries deserve general responses. If I get it wrong, which I'm sure I will do, as we all do, at least I will put my hands up and accept it. I won't try to pass my error off as a "general response".