stamp duty on second hand house.

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buzzment

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hi all..i am wondering if i have to pay stamp duty on a second hand house i will be buying in a while.the house im in now i am paying the mortgage with my g/f but the house is in her name,not mine.i have never owned a house before so technically this new secondhand house i will buy should be exempt from stamp duty if i buy and have the deeds in my name right?
 
It depends. You should seek professional advice on this. You haven't posted enough information to make the situation easy to assess, but I've given the most usual scenarios below.

If you are not jointly on the mortgage with your girlfriend, and are not claiming any beneficial interest in her house - i.e. if your contribution is by way of rent, rather than direct mortgage payment - then you may be treated as a first time buyer. This would probably assume that she's staying in her house, and you're buying a house she's not going to live in (i.e. new purchase after break-up or complete change of relationship circumstances).
If, on the other hand, the two of you are planning to sell a house that's in her sole name in order to buy a house that'll be in your sole name purely to benefit from a stamp duty exemption, you actually won't be treated as first time buyers. Revenue rules are quite clear on this.
 
thats weird cos we were told by a few people and estate agents we can do it.the house we are in is hers.she sells the house,i buy the new house in my name but the mortgage is in both our names which i know is ok,but im wondering when can i put her name on the deeds and how much,ps il ask my solicitor about this also..
 
Estate agents are not to be trusted on legal and tax issues. They are not experts on it and some give actively misleading advice, whether deliberately or through ginorance.

From what you have now posted I am extremely confident that you would not be a bona fide first time buyer under the revenue rules.
See [broken link removed]

in particular -

What is the position where a person, being a first time buyer, purchases a house using the proceeds of the sale of a house owned by their spouse or partner who is not a first time buyer?
Where a person who is a first time buyer uses the proceeds of the sale of the house they previously occupied which was owned solely by their spouse or partner to buy a house solely in their own name, first time buyer relief would not be available as the spouse or partner (not being a first time buyer) would be providing the purchase monies for the house.
 
Revenue.ie seems to be down so i could not check if the link provided contained any info about SD as well.
Just like to point about that the "in particular" section above refers to mortgage relief not stamp duty as asked by OP.

May be have a look at this thread?
 
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Just to raise another issue. If you do use proceeds, say €50k, from the sale of your girlfriends house who's to say that the money is not simply a repayment to you of money you've already spend on her e.g. if you paid for bills, nights out, clothes or contributions towards a car. Or even a non related gift which you may be liable for some tax on but surely better than being liable for stamp duty in certain cases?
 
"you should be the sole person on the mortgage and the deeds to be safe"

What protection does the partner have in that case?

In peoples rush to not pay stamp duty, they often forget such minor details as legal ownership and the like. If I was the girlfriend, I'd want my name on the deeds. Particularly if I was putting my money in and I was paying half the mortgage.

People also often forget that a Court is highly unlikely to uphold any agreement forged with the intention of defrauding Revenue i.e. my money went in, I'm on the mortgage but not on the Deeds because we did not want to pay stamp duty, we've now fallen out and he says the house is his but I have a written agreement saying otherwise. Please enforce.

mf
 
If your girlfriend decided later on that she'd like her name on the deeds then Revenue will treat it as if you are gifting her half the house. She'll be liable for gift tax as the threshold between unrelated people is very low (think it's about €23k). There will also be stamp duty due on the transfer value.
This arrangement as it leaves your girlfriend in a very difficult situation if you were to split up in the future. You're trying to avoid paying stamp duty but could end up causing yourselves a lot more grief and costs in the future by doing this. The only way around this is to stay together, get married and the transfer of assets between spouses is tax free!
Or do what everyone else has to do and cough up the stamp duty - nobody wants to pay it or thinks it's a reasonable tax but that's the law of the land.
 
bacchus said:
Just like to point about that the "in particular" section above refers to mortgage relief not stamp duty as asked by OP.
Click to expand...
No it doesn't . It refers to first time buyer relief - the relief in question is relief from stamp duty.

DerKaiser, your suggestions are skirting very close to suggesting methods of tax evasion which in the long run are certainly not in the interests of the OP or his g/f.
 
thanks everone for info..as regard to assets being tax free between married people that will change in years to come as non married couples on rights to children,property etc will be the same..happening in england soon and a landmark rights to children case up here at the mo..apart from all of that it looks like we will b paying the damn stamp duty..unless we get a crafty solicitor he he....tbc.....
 
buzzment said:
thanks everone for info..as regard to assets being tax free between married people that will change in years to come
Click to expand...
"May" change surely? What happens in another jurisdiction is not necessarily relevant here.
 
oh yea ur right........they followed us on the smoking ban didnt they ..anyways we r gettin into politics and that aint my particular cup of juristiction zzzzz...thanks for info lads..now seen as tho the laws may not change im off to get hitched in las vegas..
 
I seen several variations of this situation on these pages i.e. an unmarried couple trying to avoid stamp duty.
The only advice I would think appropriate is to get:
(a) quality financial advice on how to minimise your tax bill i.e. not pay stamp duty and
(b) get legal advice to ensure that this is legal i.e. it is not tax evasion.

Time and time again we get this moral BS about tax evasion. Maybe a lot of the advice givers own their own homes already and dare i say it begrudge people utilising their FTB status for stamp duty.

My bottom line is that where one of an unmarried couple is an FTB and can raise their own funds then it makes sense to me to put the property in their name and take advantage of any tax breaks available.
 
DerKaiser said:
Time and time again we get this moral BS about tax evasion.
Click to expand...
Moral BS is one thing - pointing out the rules as they stand is another. If a non FTB "sleeping partner" of an FTB in a PPR purchase is, in reality, actually contributing towards the purchase and has a vested interest in it then Revenue rules dictate that they are joint buyers and jointly classed as non FTBs for SD purposes. These are the rules as they stand - plain and simple.
My bottom line is that where one of an unmarried couple is an FTB and can raise their own funds then it makes sense to me to put the property in their name and take advantage of any tax breaks available.
Click to expand...
The highlighted bit is presumably key and not something that many people discussing the "one person on deeds" approach bear in mind.
 
Being in a mischievious mood I'll add the following suggestion for buzzment to check out with his solicitor.

The following is in Revenue advice on gifts used to buy a house.

What is the position in the case of a gift of part of the purchase monies? Where a first time buyer receives an unconditional gift of monies which are used to purchase a house, he/she will not be precluded from claiming first time buyer relief.

The following is my "advice"

So your girlfriend sells her house comes away with €50k profits. She gives this as a gift to you. (you pay roughly €7.5k tax?). You buy the house with your gift and a bank loan in your name. She rents a room from you for €635 a month under the rent a room scheme - no beneficial interest on her part. If the stamp duty you would have paid is more than the €7.5k gift tax, then you're on a winner.
PS. This WILL go sour if you split up, but you can't base all your decisions on the possibility of a split....

This is just one example of what should be looked into rather than accepting the lazy advice to
"do what everyone else has to do and cough up the stamp duty - nobody wants to pay it or thinks it's a reasonable tax but that's the law of the land"
 
Gift tax from non relatives is 20% above a certain threshold (used to be £15k in punts), you'll find it in revenue.ie
 
Just bear in mind that Revenue's anti-avoidance powers are pretty sweeping and any transaction or set of transactions that they deem (now or at some point in the future) to be artifically structured mainly or purely to avoid tax could be deemed ineligible for any tax reliefs sought. Not trying to scaremonger and obviously some level of pragmatism applies here but prudence dictates that such issues should be mentioned in the context of complex and potentially dodgy dealings.
 
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