Stamp duty and new houses

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Art

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Thinking of buying a new house in a development in Dublin. I realise that if I am an owner occupier there I will have to pay no stamp duty. However I already own a house in Dublin which is my PPR. (I have lived there for more than 5 years so there would be no stamp duty clawback)

I have no intention of living in the new house, at least certainly not long term. I just want to sell it pretty much after the development is completed and pocket the profit. Just wondering how long I would have to live in the new house for it to be deemed my PPR and thereby avoid stamp duty. Obviously I would me happy to move there for a short period if it could help avoid paying the stamp.

Thanks
 
Have you not sort of answered this yourself?

"I have no intention of living in the new house, at least certainly not long term. I just want to sell it pretty much after the development is completed and pocket the profit"

Does not make you an investor? And if you were to buy as an owner/occupier, how do you show Revenue that you were? Do you put your own house on the market? Rent it?

mf
 
Yes I intend to say that I am renting out my current house. I would then move into the new one for a short period - only a month if I have to and then sell it on and move back to the first house afterward.

Therefore the second house would be my PPR for a month and I would therefore save on stamp duty. I am just wondering if it is legitimate to actually do this??
 
Surely selling within 5 years will trigger the clawback so isn't irrelevant if you live there for a few months?
 
Dowee said:
Surely selling within 5 years will trigger the clawback so isn't irrelevant if you live there for a few months?
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I think the clawback only applies to renting out not selling. Living in the place for only a few months might be viewed as an avoidance tactic and disallowed by Revenue.
 
Yes clawback only applies if the house is rented. Surely if revenue did come looking you could just say that you didn't like living there and wanted to move out. Surely unless there is some specific provision there is little they could do???????
 
will you not have problems with your existing house that it will become an investment property once you move into the new house, when come to sell house 1 what is the tax implications for a house that was PPR/Invest/PPR.

Also what about the selling/buying costs - Solicitors, Estate Agents, Mortgage Fees etc. are you sure you will make money.

Also revenue could look through your short term residence and returning to existing house and deem that it is tax avoidance and charge you CGT (probably not a lot as how much would it increase in value by time you sell), and stamp duty as you maybe viewed as an investor.
 
Surely if revenue did come looking you could just say that you didn't like living there and wanted to move out. Surely unless there is some specific provision there is little they could do???????
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For better or worse, I think the Revenue tend to take their own view on things and unless you have very good proof to back up your argument, they'll stick to their own interpretation. If they were suspicious of a particular transaction, they'd prob keep an eye on your returns for the following year(s) to check whether your PPR had reverted once again.

Maybe I'm attributing far too much suspiciousness/deviousness to our poor tax inspectors :D
 
in addition to being viewed as tax evasion, you would have to calculate the costs in this strategy
Buying costs - Solicitor 1%+vat, Mortgage fees, stamp duty on mortgage tc.
Selling Costs - EA 1%+vat, solicitor 1% + vat, will you furnish the place, light fittings etc.
Also the house will now be a 2nd hand home so buyer could be liable to SD, and most new developments aim a 1st time buyer the fact that no SD so can build this into the prices somewhat, so what do you think the increase in the property will be.

Also what is the timeframe between signing contranct and purchasing - can you get mortgage approval for the combined mortgage of your current PPr & New one.

To me this is tax avoidance and the onus would be on you to prove that this isn't the case.
 
hi,
isn't tax avoidance a national pastime in this country...
if you sell the place yourself you won't need to pay for the EA's fee's and also if the price is under the 317k for first time buyers and you haven't lived in it then a first timer won't incur any stamp and the place will be like new anyway's... i think it's a good strategy if you can keep the costs down but the return would probably be minimal
 
Art said:
Thinking of buying a new house in a development in Dublin. I realise that if I am an owner occupier there I will have to pay no stamp duty. However I already own a house in Dublin which is my PPR. (I have lived there for more than 5 years so there would be no stamp duty clawback)

I have no intention of living in the new house, at least certainly not long term. I just want to sell it pretty much after the development is completed and pocket the profit. Just wondering how long I would have to live in the new house for it to be deemed my PPR and thereby avoid stamp duty. Obviously I would me happy to move there for a short period if it could help avoid paying the stamp.

Thanks
Click to expand...

Have a look at this thread.. http://www.askaboutmoney.com/showthread.php?t=11755
 
"if the price is under the 317k for first time buyers and you haven't lived in it then a first timer won't incur any stamp and the place will be like new anyway's"

Not necessarily true. AFAIK, if stamp duty relief was given to you on the property, it will not be given to anyone else, even if you have not lived in it.
 
Not necessarily true. AFAIK, if stamp duty relief was given to you on the property, it will not be given to anyone else, even if you have not lived in it.
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True

At the point of selling on , it is a second hand property, and second stamp duty rates apply, its irrelevant if the vendor has not lived in it.
 
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