stamp duty calculation

M

midland muck

Registered User
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38
Hi all,
I recently purchased an investment property for 215k. I belive this leaves me in the 4% stamp duty bracket. When working out the stamp duty do I simply divide the 215k by 1.21 to get the taxable amount less vat and multiply this figure by 0.04 to calculate the tax liability? This would leave me with a stamp duty of 7.107k. My solicitor has said that the liability is approx. 7.7k. Am I being too simplistic here?
I'll be very grateful for any info!
Thanks
 
ramble said:
VAT on property is 13.5% not 21%.
Click to expand...

Correct. If the property is new then you can deduct VAT before calculating the stamp duty liability. If it is second hand then there is no entitlement to deduct VAT. Your method is correct except that you've assumed VAT is 21%.
 
Hi all,
Just another question on this issue. Is it the actual purchase price paid to the developer that determines the stamp duty rate for a new property.
The cost of the site was €43.5k. Therefore the amount liable for stamp duty less VAT is as follows:
(215-43.5)/1.135=€151.1K
Total amount liable to SD is 151.1+43.5=€194.6k

My solicitor said that the SD is 4% which is €7.784k. I'm just unsure whether the the stamp duty rate applicable is based on the actual price paid or on the amount liable to SD. If the rate is based on the amount liable then I may be in a lower SD rate threshold. Any ideas?
 
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