flipping and tax matters

Thanks!.

I have two RIP's and waived exemption, reclaimed VAT as input credit etc.... New Prop (no. 3) bought through a flipper and want to do same. Filed return and now revenue want a receipt!. Having difficulty in obtaining receipt for this one. My solicitor was dealing exclusively with assignor's solicitor not the builder's solicitor.

He is chasing it up for me this morning and I should know more. But it appears at best case I will only get a receipt for the amount the builder charged the flipper and not the entire amount of purchase price (which I put in tax return and am sure I am entitled to). Flipper isn't VAT registered and I'm not sure if he is even resident in Ireland to complicate matters.

Would you recommend enlisting the help of someone like Loweq or other tax advisor who specialises in these areas - I feel a little out of my depth.

Skyscout

I dont think you need loweq for this-they will bring no vlaue to the process-and charge a fortune for it. Do it your self.
I too only got a receipt for the amount the builder charged to the flipper. The rest-which as you say, make the full purchase price, has not been receipted to me and may take a while to get.
Anyway Revenue wont give you a refund on the full price paid unless the extra amount of VAT has been receipted by them. The residency of the flipper is irrelevant here as the goods have not been exported. There is no such thing as a duty free exemption on property sales.
Best thing is to get receipt in your name from the builder, make VAT return and supply cover letter stating you paid more and cannot get a receipt. Give details of the flipper and ask them (through your solicitor) to investigate VAT avoidance. See other post on 'selling on Contract'

Very interesting thread, just had a thought regarding the stamp duty, were you charged stamp duty on the total price net of 13.5% VAT or the original price net of 13.5% plus the gross amount paid to the sub-seller.

I have just paid stamp on the lower price, however I am prepared to pay on the higher price-and have declared the higher price for stamp purposes. Its still with the Revenue to decide how it transpires from here.

Ditto, I paid the solicitor for the stamp duty at the higher rate (6% on the total amount) But when you take the VAT element out in my case the price I paid falls below the threshold and into the 5% band. So basically a €6k difference in SD. My solicitor is going to go in at the lower amount but has the funds available if Revenue quibble it. The vendors solicitors are in agreement that I should get a VAT invoice from the builder and they are on it, so it's just a question of when not if.....phew!

Have your vendors any idea on the VAT and CGT/income tax situation they may face? What about the invoice for the additional amount? Will they give you one? Are they VAT registered?

I'd be happy with just the builder's invoice, the vendor sold to me at a price substantially below market value so I'd rather not push it. As far as I know the vendor is not VAT registered.

1. I am purchasing a newly constructed investment property with my fiance. We both own PPRs at the moment. If we register for VAT and reclaim the VAT on this investment property will we have to pay VAT on any rental income we recieve in future or just on rent from the property which the VAT was reclaimed?

2. The builder has agreed to structure the contract to minimise the stamp duty. There is the option of including a conservatory which is not in the "main" contract. This will be executed as an extra to the main contract.

Main Contract Purchase price divided as follows:
Site purchase: 200000 SD @ 9%
Construction Contract: 480000 SD @ 7.5%

Conservatory Contract: 80000 SD @ 0%

Am I correct in saying that VAT can be reclaimed on the construction contract and the conservatory contract @ 13.5%?

3. We are also in the process of building a new house which we plan to live in and nominate as our PPR in which case the other two PPRs will then be considered investment properties aswell. Will any rent recieved from these once they are investment properties be VATable? Complicated I know but perhaps someone has heard of a similar situation?

4. Any advice or pitfalls would be appreciated.

Biggest pitfall is you are too late. You can no longer reclaim VAT on residential property as of passing of the Finance ACT.

YOu are too late only if property is residential, if a commercial property it is still ok to do this.