Stamp duty calculation ((is it price -125k) -13.5%) = applicable amount?

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fitzy10

Guest
Hi There,

I've been told that while stamp duty is normally calculated on the full house price, that really the applicable amount should be house price MINUS 13.5% - I've been told that this means that we're paying tax on a tax.
I'd really appreciate it if anyone can confirm?
I'm looking at purchasing a property in the immediate future, but I'm also interested to know if this is correct, if I can claim back overpaid stamp on my last property 2 years ago?

Any advice would be very much appreciated.
Regards, fitzy10
 
13.5% is the rate of VAT which, in the context of stamp duty queries, arises when trying to calculate the stamp duty payable on a NEW house when it exceeds 125sq.m.

If you are talking about stamp duty on second hand houses, then 13.5% is not a rate that is of any relevance.

If the property you bought 2 years ago was a new house, over 125sq.m., and you were a ftb ( first time buyer) or o.o. ( owner/occupier) and you paid stamp duty and you think that no deduction was made for the VAT element of the purchase price, you may be entitled to some refund.

mf
 
Hi all ,
I bought a second house house first time buyer back in 2004 and paid stampduty on the value of the house not minus 13.5% . I take it I should have only paid the rate of stamp duty on the (house value- 13.5% ).

Is this right ... ?
 
Stamp duty is not payable on vat - however, depending on the type of development thre may have been no vat charged in addition to the purchase price at all - eg some section 23 type developments are structured in a vat exempt manner - happened to me with a retirement home.

So the only way to check is to read the original contracta and building agreement - if they say the price is inclusive of vat - it should have been deducted before calculating the stamp dity.
 
nano said:
Hi all ,
I bought a second house house first time buyer back in 2004 and paid stampduty on the value of the house not minus 13.5% . I take it I should have only paid the rate of stamp duty on the (house value- 13.5% ).

Is this right ... ?
Click to expand...


There is no VAT aspect on a second hand house. So there is no VAT deduction to make.

mf
 
"paid stampduty on the value of the house"

If this is what you did, then this is correct.

mf
 
Yes I paid stampduty on the full amount of the house. Is there any document that states this that stampduty is only paid on the hse amt - 13.5 % ?
 
Stamp duty is assessed on the VAT exclusive consideration, Sections 48 and 56 of the Stamp Duties Consolidation Act 1999 provide that the chargeable consideration for stamp duty purposes is to exclude any VAT chargeable under Section 2 of the VAT Act 1972 on the sale or lease.
Where VAT is included in the consideration, it should be deducted before calculating the charge or rate of stamp duty.

I.E. If the total price paid for your house included VAT, you only pay stamp duty on the cost of the house less the VAT amount. However, not all houses are sold with a VAT amount included. e.g. second hand houses. As there is no VAT amount included in the price of the second hand house, you pay stamp suty on the full price of the house.
 
So are you saying I should pay stamp duty on the full house value ? This is a second hand house in question .
 
nano said:
So are you saying I should pay stamp duty on the full house value ? This is a second hand house in question .
Click to expand...

Nano, yes, everyone above is saying that you paid the correct amount of stamp duty.

As your house was second-hand, and therefore not vat-liable, there was never a question of deducting VAT from the purchase price for the purpose of calculating the stamp duty. If still in doubt, consult the solicitor to whom you paid good money to take care of this for you!
 
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