Thanks Munsterdude, I found an article that I've attached below. It seems to echo what you're saying:
The house I'm buying is partially complete and has a "schedule of outstanding works to complete", which was attached to the standard Law Society contract on exchange of contracts.
For example, this schedule includes kitchen and tiling allowance to the purchaser as there is no fitted kitchen.
The house was first marketed by the estate agent as having no stamp duty liability attached as it was clearly a new house with exemption from stamp duty given by virtue of its floor area.
My solicitor indicated that it was a "new property" under construction.
Earlier this year I was informed by the seller that the house would be sold to me as a second-hand property ± not a new house. I find this hard to accept, however, I did enter into the contract as I want to purchase the property.
The vendor continues to construct the house and make the property available for snagging using sub-contractors with himself as "foreman".
Is this normal or can I have someone more independent for this job?
Solution
I can only guess that the vendor wanted to avoid "opening up" a tax liability to himself and transfer the tax liability instead to the purchaser in the form of stamp duty.
The stamp duty liability is substantial. However, this doesn't make complete sense as stamp duty is collected by the government, not him.
Is there any way I can reverse this "secondhand" idea as it is obviously costly for me and it is a new property? What do you suggest?
The stamp duty payable on the purchase of your house depends on the following four factors:
1.Whether it would be regarded as a new or secondhand residential property
2. Whether you are an owner-occupier
3. If you are an owner-occupier, whether you are a first-time purchaser
4.Whether a Department of the Environment Floor Area Certificate will issue in respect of the property by virtue of it being of an area of less than 125 square metres.
Where the property you are purchasing is a new residential property and you are an owner occupier and youobtainaFloor Area Certificate issued by the Department of the Environment in respect of the property, no stamp duty would apply, regardless of the purchase consideration.
An appropriate certificate confirming the facts must be included in the Deed of Transfer in order for the stamp duty exemption to apply.
* Is the property you are purchasing, new or second-hand?
The Revenue Commissioners generally accept that where a house has not been occupied prior to the purchase and is purchased within a reasonable time after it has been built that it
is a new house for stamp duty purposes.
The legislation does not define what is regarded as a "reasonable time" and this will be considered by the Revenue Commissioners on a case by case basis.
However, in light of the fact that the seller has indicated that the property would, in their view, be a second-hand property, I would suggest that you ask your solicitor to enquire from the sellerasto why they believe that this is the case.
For example, has the property been used or occupied since the date of construction. If not, you should ask your solicitor to obtain a certificate from the vendortothateffectastheRevenue Commissioners may require this as proof that you have purchased a new house.
* Will you be an owner -occupier?
An owner-occupier is a person who purchases a house to be occupied by the purchaser (or a person on his behalf) as his only or principal place of residence and no rent (other than rent under the rent a room scheme) is received in respect of the property for a period of five years from the date of the purchase.
In effect, this means that you (or another person on your behalf) must occupy the property as your only or principal place of residence and not receive any rent in respect of the property with the exception of rent up to €7,620, which you are entitled to receive under the rent-a-room scheme.
If the property exceeds 125 square metres and no floor area certificate is available, the stamp duty rates applicable will depend on whether you are an owner-occupier and first-time purchaser (whether in Ireland or elsewhere). I have assumed that a Floor Area Certificate will be issued and that no stamp duty applies to the sale.
If you are purchasing the property as an investor, there is no stamp duty exemption available and the rates would range from 3 per cent to 9 per cent, depending on the consideration and whether it is a new or second-hand property.
Without full details, it is not possible to confirm the applicable stamp duty if any.
You have also raised the question as to whether you can challenge the fact that the vendor acts as a "foreman" in respect of the property and is making the property available for snagging.
It would be prudent to arrange for your own engineer to inspect the property for snagging purposes to check that the property, when completed, has been built in accordance with your "schedule of works" and compile a list of any matters that have not been completed to his satisfaction prior to completing the sale.
