First Time Buyers and Stamp Duty Clawback

S

Sweet Pea

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Hi,

Could anyone who has The Irish Times to hand today, have a look for a Q&A section (I think it could be in the Finance supplement) where someone asks an expert (Dominic Coyle) about stamp duty clawback for first time buyers. A friend has just given me a fright as she says that he advises that if a first time buyer sells a property within the first five years, even if they have never rented it out and have lived in it all the time, that they are liable for a stamp duty clawback! I don't have the article to hand so don't know if my friend has misread it.

I am really alarmed - I bought an apartment with a friend (both first time buyers) a year and a half ago. We both live there and have no intention of renting it out. We plan to sell up when we have been there two years. It is our PPR. Why should we pay stamp duty when we sell, when it is our home, we are supposed to be exempt from stamp duty as first time buyers etc? Is it the case that all First Time Buyers must live in a property for five years before they can sell it to avoid stamp duty clawback?

It was my understanding that you were only liable for a stamp duty clawback as a first time buyer if you rented the property out and it was not under the rent-a-room scheme. That's what the Revenue site says.

Could someone please reassure me and let me know if my friend has misread the article or whether the columnist in the Irish Times has got it totally wrong!

Thanks
 
Sweet Pea said:
she says that he advises that if a first time buyer sells a property within the first five years, even if they have never rented it out and have lived in it all the time, that they are liable for a stamp duty clawback!
Click to expand...
This is not correct. If the IT does say that then they are simply wrong. The SD clawback only applies if you rent the property out (other than under the owner occupier rent a room scheme) within 5 years of purchase as an owner occupier.
 
I thought your friend was wrong but that is what Coyle says. I didn't think that was actually the case though myself.
 
Thanks Clubman - that was what I thought. I've just come back from the shops armed with the Irish Times and indeed, Coyle gives the wrong info. If you have a copy, look at Page 11 of the Finance supplement.

The revenue site gives the following info
[broken link removed]

When does a clawback arise?
A clawback arises if rent is obtained from the letting of the house, other than under the rent-a-room scheme. The clawback amounts to the difference between the higher stamp duty rates and the duty paid and it becomes payable on the date that rent is first received from the property.

I am absolutely furious as I got a fright - there are lots of first time buyers out there, happily living in their homes who now think they will be liable for stamp duty if they sell before 5 years and are probably panicking!
 
To avoid further confusion, the answer in today's Irish Times is wrong. Clawback of stamp duty applies only to those first-time buyers who rent their properties out within five years of availing of the stamp duty exemption.

Apologies for the mistake,
Dominic
 
HI,

Does anyone know when this "clawback" is applicable from. I bought a house in 1993 as a first time buyer(was exempt from stamp duty) and I thn rented it out in early 1995. Do you know if I am liable for any "clawback" tax on this.
I am a bit concerned by the recent news about the revenue investigating this.


best regards.
 
HI,

Does anyone know when this "clawback" is applicable from. I bought a house in 1993 as a first time buyer(was exempt from stamp duty) and I thn rented it out in early 1995. Do you know if I am liable for any "clawback" tax on this.
I am a bit concerned by the recent news about the revenue investigating this.


best regards.

​
 
Talk to an accountant quick. You would have been liable since 1995* and interest is charged at a daily rate from then. The longer you leave this the more the compound interest will stack up.

*Certain exceptions apply.
 
Me and fiance thinking of purchasing a property to rent. She has already a house but i dont so can we claim FTB allowance if we are married or would it make more sense to purchase house before we get married in my name
 
"Me and fiance thinking of purchasing a property to rent. "

So - you are buying as investors. It does not matter who is on the title. You pay stamp duty at full rate as investors.

mf
 
Thanks for that,

So we would have to live in this for a period (im assuming 5 years) to avail of the allowance?

Say if this was to be our PPR for the x period would it be benefical to purchase property prior to getting married or would we still be able to claim FTB relief?

Thanks
 
Provided the house is in your name only and it is your PPR for the entire period (5 years) and the property is not let except in relation to the rent a room scheme (rental income less than 7620 pa) then you do not have to pay stamp duty.

Once you get married you have 2 properties but you can only have one PPR so you have to decide what you are going to do with the others persons property.

If you decide to let the property and it is within the 5 years then SD at what an investor would have paid is payable from the date the first rental in paid to you.
 
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