Stamp duty issue:

I'm not a first time buyer, but i am buying a new house. The house costs 300K and is 2300 square feet in size on a large site.

the estate agent says i'm not liable to pay stamp duty!!! Can anyone correstly inform me if I am liable for stamp duty or not pls

Check out looks like the stamp duty might be 5% as it's over 125sqm and cost 300k. But I'm sure someone will be able to tell you for definite.

Not quite. First off, don't expect independent, professional advice from somebody (such as an estate agent) with a vested interest in selling you something. Even if they could well be correct in this case! Secondly, see OASIS for the rules that apply in this case:

Stamp duty on new houses and apartments

Owner-occupiers of new houses/apartments are exempt from stamp duty, provided that the area of the house or apartment does not exceed 125 sq. metres (1,346 sq. feet) and a has been issued.

...

If the area of the house or flat is greater than 125 sq. metres (1,346 sq. feet), some stamp duty is payable if the Chargeable Consideration is above the relevant exemption threshold. (The stamp duty is assessed on either the cost of the site or 25% of the cost of the site plus the building costs (less VAT), whichever is the greater figure. This figure is called the Chargeable Consideration.

Click to expand...

I bought a house approx 2 years ago and I did not pay stamp duty. I was not a first time buyer, the house was 2,200 square feet. Cost of house was 350,000. I was exempt under Chargeable Consideration rule above (per Clubman's post)

Thanks for the info!!! So how do I work it out whether i'm liable or not or is it a job for my solicitor??

thanks again

Follow the instructions in the OASIS article. Your solicitor will probably be obliged to double check things anyway.

i've a similar scenario.

second house bought for 175k
site value 35k
stamp duty?
is it 175-35=140 less 13.5% VAT = 123,348 + site cost 35,000 = 158,348 @ 3% = 4,750 stamp duty ????

24 hours gone by and still no answer to my equation?

this stamp duty obviously is a baffling topic!

Please note the on "bumping" threads up the forum listing.

Are you saying that your house above is greater than 125sqm so the chargeable consideration is calculated based on the construction costs/site value? Has your solicitor not advised you on the stamp duty liabilities arising?

Note that it is unlikely that the building cost is simply the sale price less the site cost since the sale price also includes things like seller's profit/margin etc. You would neet to ascertain precisely the site and building costs before you can work out the chargeable consideration and thus the SD liability.

Yes its over the 125 sq.m.

My solicitor has worked out the SD but i can't get my head around his calculation.

Basically its my second purchase for ivestment purpose's with a section 23 allowance.

Therefore i've signed two contracts 1-site , valued ast 35k
2 - construction of house 140k

As there is no VAT on the site costs i think my solicitor has taken the 13.5% off the construction value then added the site value and got the %age on that figure?

anyway i'm still none the wiser.

"As there is no VAT on the site costs i think my solicitor has taken the 13.5% off the construction value then added the site value and got the %age on that figure?"

There is V.A.T. on site costs, and you are entitled to strip out all V.A.T. before calculating stamp duty.

This misconception is very common - even some of the Revenue Commissioners staff think it to be the case. In marginal cases, this mistake can cost thousands. The very complex calculation made by your solicitor is the approach commonly (and incorrectly) taken by Revenue. Thay always back down when queried on this issue.

Interesting. However, is there always stamp duty on sites? What about where a landowner, not registered for VAT, and where no development has taken place on the site, sells under a contract with a clause making a building contract with a certain developer compulsory?

Hi V. While it mightn't perhaps be true to say that there is always V.A.T. on a site (the exceptions are too rare to be meaningful), there certainly would be in the circumstances you describe.

This is one area where there was some elaborate avoidance prevalent a couple of years ago; there was a budget change brought in to stamp it out, but it was done without any admission that the loophole was valid, and I think Revenue are pursuing\have pursued the builders involved. I had a builder or two enquiring about V.A.T. avoidance at the time and (more by laziness than strategy) steered 'em away from it. Anyway, the relevant law is:

Section 4(5) of the V.A.T. Act 1972: [I haven't checked if this was amended since, so don't take as gospel]

"Where an accountable person disposes of an interest in immovable goods to which this section applies or carries out any development in relation to such immovable goods and in connection with that disposal or carrying out of development some other person who would not, apart from this subsection, be regarded as an accountable person, disposes of an interest in relation to the goods concerned—
( a ) that other person shall, in relation to the disposal by him, be deemed to be an accountable person, and
( b ) the disposal shall be deemed to be a delivery, made in the course of business, of goods which that other person has developed."

From Revenue Guide (dealing with the "usual" rules for whether a sale of land is liable to V.A.T., in which rules the sale of an undeveloped site would otherwise be exempt)


"It will be seen that whether or not any particular supply of property is taxable depends on the facts of each case and no general rule can be relied on to determine the questionin every case but the following question and answer system may be helpful. The system should not be used in cases of building licences and similar arrangements."

From older Revenue Guide: .(referring to building licences and similar arrangements):

".....it is specifically provided that a landowner who does not himself engage in any development work can, nevertheless be treated as a taxable person in certain circumstances..."......

Mob, thanks for that. Some solicitors out there arn't the maywest with the aul calculator!