Stamp Duty Liability

Quick questions for those of you in the know. I bought a house in 2001 the value of which at the time was 190000. My five years are due up in December of this year. If I rent out before this time is up does anyone know how much stamp duty I would be liable for or where I could find out this information? Also, if I were to subsequently sell how do I find out what my CGT liability would be?

Thanks for you help

D

Did you buy in 2001? In that case your five years are already up. i.e. 02,03,04,05,06. So no stamp duty clawback to worry about

Capital gains tax - have you lived there since buying it? If so you are probably exempt from CGT - your principal private residence - PPR relief. If you rent out for say two years and then sell you are entitled to partial relief based on occupation over total ownership

Sorry! Typo! I bought the house in 2002 so the five years will not be up until December 2007!

Thanks for the info on CGT!

D

Edit: typed up before the correction.

As pointed out by Bazermc, in your case the time is up.

Had you bought in Dec 2002 (in which case your five years would be up Dec of this year) and decided to rent before Dec then you would be liable to pay the full SD that an invester would have paid in buying the house in 2002. SD (and SD clawback) is an all or nothing thing! You don't pay a portion of it, you pay it or you don't.

CGT liability is calculated by:
Taxable amount = Sale price - purchase price - certain deductables (selling costs etc.)

CGT = Taxable amount * ( (Period of rental [technically period of non PPR] - final 12 months [if rented/non PPR for final twelve months])/Total period of ownership)

So, if you owned for say 4 years and rented for 2. You'd pay a SD clawback on renting before five years.
Then CGT of "Taxable amount * 1/6" (1/6 = 2 years rented - final year exemption / 6 years ownership)

If you owned for 5 years and rented for 1 (the final year - you must sell before this twelve months is up or it reverts to the above calculation).
No SD clawback.
No CGT due to final 12 months exemption.

Sorry for jumping on the band wagon on this one! I bought my apartment back in April 2003 - value then € 254,000 - value now in the region of € 385,000. I was a FTB - no stamp duty was paid...
Want to buy a house in the coming year, and if possible, hold on to the apartment - can someone please advise how much SD I would have to pay if I was to buy a new place and rent out the apartment?
I have been told sooo many different stories - my head is addled!!
Ta!

See here for current SD rates. I think that the same investor rates applied in 2003 as well but double check.

If it was exactly €254K then €254K @ 4% or €10,160. If it was just over €254K then 5% applies.

hi I m new and can t believe that this stamp duty clawback might apply to me.
I bought a second hand property in 2001 as a first time buyer for 171k. I did not need to pay stamp duty. I lived in the property for a year and it has been rented out since. I have since purchased another property and that is my home.I intend to sell the first property and have just given my tenants notice. I know I am liable for CGT. Am I also liable for stamp duty clawback ? If so how much ? How would I know about this ? And when was it due to be paid? I have submitted returns every year and paid CGT on the rental profit. Can t believe I didn t know about this as have just got around to the fact that my CGT bill will be so high!
can anyone claify this ?Thanks a million

missy1 said:

hi I m new and can t believe that this stamp duty clawback might apply to me.

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Did you not check out the tax implications of renting out the property that you originally bought as a PPR?

I bought a second hand property in 2001 as a first time buyer for 171k. I did not need to pay stamp duty. I lived in the property for a year and it has been rented out since.

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You were liable for a clawback of stamp duty to the amount that investor would have paid on the same purchase (I don't know offhand what the rates of SD were in 2001) at the time the property was first rented out so that liability is c. 6 years overdue now and you should be aware of this issue as it concerns you:

Revenue acts on abuse of stamp duty relief

I have since purchased another property and that is my home.I intend to sell the first property and have just given my tenants notice. I know I am liable for CGT. Am I also liable for stamp duty clawback ?

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Yes.

If so how much ?

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2001 rate of investor SD on €171K whatever that was. Today's rate is 3% or €5,130 but it may have been different in 2001. You may also be liable for interest and late penalties. You would also want to have your rental income tax returns up to date in case you have further liabilities outstanding on that front.

How would I know about this ? And when was it due to be paid?

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See above. Your accountant or tax advisor should have told you. If you didn't have one and didn't apprise yourself of the facts then that's obviously a problem but not an excuse that Revenue will accept for not discharging your liabilities.

I have submitted returns every year and paid CGT on the rental profit.

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You don't pay CGT on rental income. I presume you mean income tax?

Thanks for your reply.
yes I did mean income tax. All these are currently up to date.I sent them all in late last year so at least thats sorted.My accountant is a family member and hasn t told me about this. I only found out about this by stumbling onto this site.

Yes I should have known about all the implications before I decided to rent it .The only good thing is that my profit is high so this 5k extra and penalties won t be too harsh. Would you know how I would even go about paying this ? I Knew I shouldn t have involved family.

missy1 said:

Would you know how I would even go about paying this ?

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Get a proper tax advisor to assist you with making a later return of the outstanding SD liability. S/he may be able to help you to do this in a way that minimises/mitigates your liabilities/interest/penalties. You could just contact Revenue directly and come clean but you would be better off getting professional assistance in my opinion.