Key Post: Stamp Duty on a site

M

Marion

Guest
We purchased a site on which we are presently building. Our solicitor collected stamp duty from us..was he correct in doing so??

Thanks
 
stamp duty on site

A site is not regarded as residential property so its non residential property for stamp duty purposes and is payable on sites worth more than £5000.00 on a sliding scale up to 6%.
A Deed transferring ownership of land needs to be registered and that cannot happen unless the Deed is stamped.
 
Stamp

It is my understanding that if you put the site in just one name you only have to pay Stamp at 3% rather than at 6% if it is put in both names...by no means an expert so don't know if this is correct.
 
stamp duty on site

No there is no benefit - the duty is payable on the value of the site not on the number of names on title. What you might be thinking of is a situation where there is a transfer of a site/house/property frrom parent to child - in those situations and bearing in mind the latest (Dec. 2000) exemption for transfers of sites to children for building own homes, stamp duty is payable at what is called "half the ad valorem rate" i.e. there is a stamp duty break (you pay half) from parent to child.

mf
 
stamp duty on site

I thought that there was no stamp duty when a parent gives a site to a child. However when transferring ownership the deed needs to be stamped as MF says above and there is a 3% stamp duty payable. Does this apply in all cases?
If a site is transferred to a child and this site is then to be registered either with the land registry or registry of deeds under the new name is there any exemption from this stamp duty for parent to child?
I thought that unless the site value was >200K that there would be no duty payable? Does one still need to get a valuation completed to prove that the site has no greater value than 200K?

Any input/advise welcome.

Regards.
 
stamp duty on site

<!--EZCODE BOLD START--> I thought that there was no stamp duty when a parent gives a site to a child.<!--EZCODE BOLD END-->

I'm not sure that this is correct. [broken link removed] states that:

<!--EZCODE ITALIC START--> <!--EZCODE BOLD START--> ARE THERE ANY EXEMPTIONS OR RELIEFS?<!--EZCODE BOLD END-->

Yes. The main exemptions and reliefs are:

...

<!--EZCODE UNDERLINE START-->Reliefs<!--EZCODE UNDERLINE END-->

- A transfer of property (other than shares) to certain relatives, (e.g. parent, grandparent, step-parent, child, brother, sister, half-brother, half-sister, aunt, uncle, niece, or nephew). Duty in such cases is payable at half the normal rate applicable. This relief does not apply to
leases or to transactions involving in-laws and/or cousins.<!--EZCODE ITALIC END-->
 
stamp duty on site

Thanks CM

Do you know what is the position in relation to transfer before 1 Jan 2002?

Regards.
 
stamp duty on site

Let me clarify.

1. Is there stamp duty on a site? No relationship between parties, site being purchased at full market value (or given as gift), then stamp duty payable on full market value at non residential rates so anything over £60,000.00 is stamped at 6%.

2. What if there is a relationship between the parties? Finance Act 2001 exempts a transfer of a site from parent to child for instruments executed after 6.12.2000 and the transfer must contain the following cert.- paraphrased:
(a) Its a transfer of a site
(b) its between parent and child and parent is owner of lands prior to transfer
(c) value of site is no more than £200K and this transaction is not part of a series of transactions where property in excess of £200K is being transferred to child
(d) Purpose of transfer is to enable child to construct a dwellinghouse thereon to be occupied by child as only or main residence
(e) This is the first and only transfer of a site for benefit of the child
(there can be all kinds of issues as well e.g. how big can a site be, what if child subsequently changes his /her mind and decides not to build but to sell…..)-
If there is any issue on value at all, you should get a valuation. Revenue need to adjudicate these deeds and if they suspect an undervalue they will require the property to be valued by their own valuation office. This will take a long time, trigger expense, prevent the registration of the deed etc., etc.

3. What if its not a site but a house or flat that is being transferred from parent to child? There is relief and stamp duty is payable at half the due rate or half the “ad valorem” rate as it is called.

4. What if the transfer is to not just a child but to a child and his or her spouse or to a child and friend? The relief does not apply.

There is a very real issue about taking a gift of a property as a child, availing of the stamp duty relief and then transferring the property into the joint names of child and spouse. This raises CAT issues and can trigger a CAT liability for the spouse donee. What has happened is that the parent has essentially made a gift to what is called a stranger in blood i.e. a son or daughter in law. Its quite commonly done but the Revenue will take issue with it if it comes to their attention.

Hope this helps to clarify things.

mf


CM
The new SD1 does not refer to the parent /child site situation - I wonder if the Budget will take that out?
This new leaflet only came out a few weeks ago and refers to matters from 1.1.2002 and it occurred to me to wonder if it was anticipating changes in the Budget?
All will be revealed shortly by Charlie.

mf
 
Stamp duty

It's the same as above - as far as I can see the version of the booklet linked to above is just a € version of [broken link removed]. Perhaps "property" above doesn't cover a site and/or there is another rule under which such a transfer is SD exempt?
 
Stamp duty

I may be purchasing a site in Dublin,it having planning for 7 arp..Can i purchase them one by one thus keeping down the rate of stamp duty?. Thanks Paul.
 
stamp duty on site

Thanks mf for the clarification.

The reason I asked is because I have just gotten a deed of transfer completed - my parents have signed over a site to me. I have started building on it already. Anyhow my solicitor asked me to get a valuation completed on it and when I asked would I not be exempt from SD as it was from parent to child she said that I would still have to pay SD at half the rate if the value of the site was greater than 5K. My understanding was that I wouldn't pay the SD unless the site had a value greater than 200K.


Regards.
 
Stamp duty on a site & the subsequent house

Hi,

If I was to buy a site in the next few months but not build a house on the site until a few years down the line what would the stamp duty implications be?

1) Would I pay non-residential property stamp duty on the purchase of the site, and,

2) When I actually built the house would I then have to pay residential property stamp duty, and lastly,

3) If I do have to pay the residential stamp duty is it calculated on the total cost of the project i.e. house & site or on just the cost of constructing the house, seeing as the stamp duty has already been paid on the site?

Could someone please outline how the stamp duty is dealt with in a situation like this.

Thanks,

Lucky.
 
Stamp duty on a site & the subsequent house

Hi again,

One or two things I forgot to mention in my previous post:

1) I am a first time buyer

2) Expected Site price: €60,000 (max)

3) Aproximate house building costs (using values from elsewhere on this site) €165,000

Seeing as the cost of building the house is under the first time buyers threshold for stamp duty is my only duty payable on the site cost, or would I have to pay the balance of the duty on completion of the house, seeing as the total cost of site and house is €225,000 (3% duty)?

Thanks again,

Lucky.
 
Re: Stamp duty on a site & the subsequent house

Hello Lucky

Stamp duty is a tax on a document used to transfer ownership in property i.e. the site -(I'm paraphrasing Revenue speak here).
In your situation you only pay stamp duty on the value of the site. There is no stamp duty on the cost of building the house. Stamp duty is payable at non residential rates on the site value. The duty on values EUR31751-63500 will be at 4%.
FTB situation has no bearing here - it applies to residential property only.

Hope this helps.

MF
 
mf

The new SD1 does not refer to the parent /child site situation - I wonder if the Budget will take that out?
This new leaflet only came out a few weeks ago and refers to matters from 1.1.2002 and it occurred to me to wonder if it was anticipating changes in the Budget?
All will be revealed shortly by Charlie.

mf posted the above - was there a change?
 
Re: mf

Extract from most recent SD1 - paraphrased.

Finance Act 2001 exempts a transfer of a site from parent to child for instruments executed after 6.12.2000 and the transfer must contain the following cert.- paraphrased:
(a) Its a transfer of a site
(b) its between parent and child and parent is owner of lands prior to transfer
(c) value of site is no more than £200K and this transaction is not part of a series of transactions where property in excess of £200K is being transferred to child
(d) Purpose of transfer is to enable child to construct a dwellinghouse thereon to be occupied by child as only or main residence
(e) This is the first and only transfer of a site for benefit of the child

(there can be all kinds of issues as well e.g. how big can a site be, what if child subsequently changes his /her mind and decides not to build but to sell…..)-
If there is any issue on value at all, you should get a valuation. Revenue need to adjudicate these deeds and if they suspect an undervalue they will require the property to be valued by their own valuation office. This will take a long time, trigger expense, prevent the registration of the deed etc., etc.

mf
 
Re: >>Stamp Duty on a site(key post)

On revenue.ie it states:

#
Where an individual purchases a site in connection with,or as part of,an arrangement to build a house or apartment on that site then stamp duty will be charged,subject to the reliefs referred to above, based on the aggregate amount of the site cost and the building cost at the appropriate residential property rate.

#
Where an individual purchases a site with no connected agreement to build a house or apartment, the transfer of the site is chargeable at the non-residential rates in the table below.

My question is if you purchase a site for let's say €150k that has planning permission and you commence building straight away, is atamp duty charged on the site only or is it charged on the site value and building costs?
 
Re: >>Stamp Duty on a site(key post)

As long as the site purchase and building agreement are unconnected then the stamp duty should only be on the 150k (8%, would be 9% if over 150k). This is not always a good result. If the site purchase was connected with a building agreement and you were to be an owner-occupier there would be no stamp duty if the house did not exceed 125 sq m in area and possibly no stamp duty but certainly significantly reduced stamp duty if the house is larger than 125 sq m.
 
Re: >>Stamp Duty on a site(key post)

DarraghDuane, if I purchased a site with OPP for €150k and then built a house on the site (by direct labour) exceeding 125 sq.m as an owner occupier, I would not pay stamp duty on the site when purchased, I would pay stamp duty as follows:

"If the area of the house or flat is greater than 125 sq. metres (1,346 sq. feet), some stamp duty is payable if the Chargeable Consideration is above the relevant exemption threshold. (The stamp duty is assessed on either the cost of the site or 25% of the cost of the site plus the building costs (less VAT), whichever is the greater figure. This figure is called the Chargeable Consideration."
 
Re: >>Stamp Duty on a site(key post)

Unfortunately Techman, this isnt the case. As the last poster said, where the purchase of a site is unrelated to the building thereon ( i.e contracts for sale of site are not conditional on the purchaser entering into building agreements with a specific developer) then you do pay stamp duty on the site as if it were unresidential property. Although its certainly one the goverment should IMO review.
 
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