Stamp Duty on second house

N

noobie99

Registered User
Messages
67
Hi,

Quick question on purchase of second house.

Buying second house and that will become PPR (Principal Private Residence) This second house is new and under 317K and over 125 square metres.
.
Is there stamp duty due (@ 5% I presume).
From my reading of the revenue docs there is but the estate agent reckons there isn't.

Thanks,

noobie99
 
Don't expect independent, professional tax advice from an estate agent with a vested interest in selling you something but in this case s/he may be correct. See :
Stamp duty on new houses and apartments

...

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...
If in doubt get independent, professional advice and verify the rules with Revenue.
 
Cheers Clubman,

I've had an in depth look at the revenue stamp duty page you supplied. I'd previously thought that the stamp duty for new houses over 125 sq. metres was based on house price but as you've pointed out it's actually based on the chargeable consideration. This means that even though stamp duty may be payable there's a good change that it'll be less than if calculated against the house price - as the CC is Site Cost or (Site/4 + Building cost (less VAT)) it will be less than the sale price.

BTW Is it my solictor who will determine this or can I ask the builder in the meantime so I've some idea as tom what stamp duty will be levied?

Thanks,

noobie99
 
noobie99 said:
BTW Is it my solictor who will determine this or can I ask the builder in the meantime so I've some idea as tom what stamp duty will be levied?
Click to expand...
Your solicitor would be a better bet than the builder since I'd say the solicitor would be better placed/qualified to dispense authoritative advice about stamp duty than the builder. And the builder has a vested interest in you buying the house while the solicitor is working on your behalf. On the other hand I would have assumed that you could work it out for yourself based on the information above? I think all that you need is an estimate of the site value?
 
Your solicitor- for the reason that to avail of the above exemption, the house has to be sold by way of contract for sale of a site and building agreement. He will know only either by contacting the vendors solicitor to find out the method of sale, or by receipt of the documents. Bear in mind that if the house is substantially completed, it is more likely to be sold by contract for sale of the house therefore the exemption will not apply.
 
Vanilla said:
it is more likely to be sold by contract for sale of the house therefore the exemption will not apply.
Click to expand...
Vanilla can you explain that in plain English to plebs like me please? :eek:
 
Oops! Sorry, being in that mindset of legalese, I didn't realise I wasn't being clear.

Its just that the exemption applies where the site is being sold by one contract and there is a seperate ( but connected i.e. you could not buy the site without contracting with X Builders to build your house) building agreement. So that the overall purchase price of for e.g. €200,000 is split up into a contract for the sale of the site at €50,000 and a building agreement with a builder to build your house on that site for €150,000. This is standard when buying off plan, or when the house is in the process of being built.

However if the house is substantially complete what you may find is that you are being sold a house for €200,000, no seperate contracts for land and building. In this case the exemption would not apply. Although you could still deduct the VAT element before arriving at the stampable figure.
 
Thanks for the explanation. I am surprised that this is the case. Do you have a reference to the relevant Revenue or TCA rules by any chance?
 
Gaff only has foundation poured at the mo. so we'll wait and see.

Thankls for the info. folks,

noob.
 
You must log in or register to reply here.
Back
Top