is Stamp duty calculated on value or Contract price

M

Molly

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apologies if this has been covered befoee, could'nt find a reference to it in previous posts..

is stamp duty calculated on the contracted price or on the bank valuation?

a friend of mine has a contract price of €300,000, the valuer has valued the property at €320,000. her solicitor is saying that stamp duty is payable on the value as per bank valuation whereas i was always of the understanding that it was based on the contract price to purchase
 
Stamp duty is payable on the market value of the property, not on contract price, because otherwise you might have people choosing to use a low price so as not to pay Stamp duty on full value. Think of where a parent is giving a gift of a house to a child - no money changing hands.

In your friends case, that is very unusual that a valuer is coming in with a higher value than in the contract. They normally know what the contract price is and go with that if its not off the wall.

mf
 
Stamp duty is calculated on the fair market value of the property. Obviously the true market value is hard to pinpoint but will normally be the selling price unless the seller is selling at a significant discount. Where there is doubt about the market value I think that Revenue might accept a few different independent valuations and take an average. If, in this case, the seller is clearly selling at a discount to the market value then the stamp duty is calculated on the higher figure and the discount could be assessable for gift tax.

Post crossed with mf1's but on the same track...
 
Had a read of this article on but it doesn't clear things up as it seems to use "value of the property" and "full purchase price" interchangeably. There is relief though for transfers between parents/children and relatives.

With the banks valuation, I thought they generally went with the selling price or higher, that way they have no problems giving out the 92%/100% mortgage?
 
As mf1 says most property sales are done on the basis of the full market value - i.e. the buyer is the individual who is willing to pay the highest asking price for the property. In cases where the sale price is an obvious discount on the fair market value SD is calculated on the higher figure and the discount could give rise to other tax implications.
 
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