Liable for stamp duty?

[Rainbow]

Hi,
Would appreciate if someone could help me with my query:
Was moving back to galway and buying a home from my parents, And as it's my first house...i thought No stamp duty.

Anyhow sale agreed and bought the house (about 2months ago), but job fell through and never moved into the house (as nevered moved back). Now renting out the house and paying the morgage.

Question: Am i liable for stamp duty? As i never moved into it or does the first time buyer with stamp duty apply?

Thanks!
Rainbow

 

[ClubMan]

And as it's my first house...i thought No stamp duty.

First and non first time buyers of new houses under 125sqm are exempt from stamp duty. First time buyers of second hand houses under €317,500 are exempt from stamp duty. Otherwise some stamp duty may be chargeable. In the case of asset transfers between family members stamp duty at half the normal rate is chargeable (other than between spouses where the transfer is exempt from stamp duty).

Question: Am i liable for stamp duty? As i never moved into it or does the first time buyer with stamp duty apply?

If you are not an owner occupier then it would seem to me that you may be liable for half the normal investor rate of stamp duty on the property. See for more on the rules and the rates that apply. How much was the house and who is living there now? There may be an exemption for you buying from your parents but allowing them to continue to live there - I'm not sure.

You might want to get independent professional advice on this matter.

 

[evelyn]

I am interested in what you say about transfer of assets between family members being half the stamp duty rate. Does this apply if you are purchasing a house from your brother/sister or is it only parents?

The other issue I was wondering about is, does one have to tell the solicitor/revenue if you are purchasing a property from a relative. Will the valuation be questioned and an independant valuation be sought by the revenue?

I can't believe the stamp duty is so high in Ireland, in England it is 1% for purchases £121K up to £250K.

 

[ClubMan]

I am interested in what you say about transfer of assets between family members being half the stamp duty rate. Does this apply if you are purchasing a house from your brother/sister or is it only parents?

The OASIS link that I posted above explains:

Transfer of property between relatives

Stamp duty is payable at half the normal rate applicable if there is a transfer of property (other than shares) to certain relatives (e.g., a parent, grandparent, step-parent, child, brother, sister, half-brother, half-sister, aunt, uncle, niece or nephew). This relief is not available on leases or on transactions involving cousins and/or in-laws.

For more on this see [broken link removed].

The other issue I was wondering about is, does one have to tell the solicitor/revenue if you are purchasing a property from a relative.

Why would you not if failure to do so would result in a higher than normal stamp duty charge?

Will the valuation be questioned and an independant valuation be sought by the revenue?

I think that it's up to the individual (and perhaps to some extent the solicitor?) to ensure that a fair market valuation of the asset is used when transferring it. Assets can be transferred at a discount but there would be other (e.g. gift tax, CGT etc.) implications. However artifically reducing the valuation simply in order to avoid the normally applicable rates of tax (e.g. stamp duty) would involve tax evasion and nobody in their right mind would condone, facilitate or advise this as a prudent way to proceed. I'm not sure what checking/enforcement (that a fair market value is used) is done at the time of the transfer but any dodgy dealings could come to light at any stage in the future with the usual concomitant hefty penalties etc.

 

[Vanilla]

all transactions between related parties go to the adjudication branch of the Stamp Duty unit, where they assess whether the transaction is for market value or not.

 

[ClubMan]

Interesting - thanks for that info Vanilla.