Stamp Duty

[Eastlight]

Afternoon All

Any stamp duty experts out there???

I have just put a booking deposit on a new house, which is excess of the 125m floor area threshold. From a layman's perspective the house is substantially complete in that it is weather tight with windows doors fitted. A good deal of work remains to be completed on the inside in terms of second fix electrics and plumbing together with all carpentry and kitchen work.

I am due to sign a standard site purchase and building contract next week and am working off the assumption that stamp duty payable will be based off 25% of the building cost less vat.

Could the fact that the house is already substantially complete result in me having to pay stamp duty on the whole cost as if it wasn't a new house?

My lawyer doesn't seem too confident on the answer.

Thanks

Eastlight

 

[nmh001]

No, the fact that the property is almost complete doesnt matter. The main issue is that it is a new house and that you will be an owner-occupier.

You will pay stamp duty on the greater of
- 25% of the vat-exclusive total price of the house or
- 100% of the vat-exclusive value of the site.

 

[Fergal]

Re: Stamp Duty on New House

I'm confused about the actual calculation and have not been able to find any examples.

House (excl VAT): 300K
Site (excl VAT) : 100K
Then since 100K > 300K/4, Stamp Duty is payable on the site.

But now the trouble starts.

Interpretation A
The table for residential (non first time buyer) says that if the "Aggregate Consideration" is less than 127K then no stamp duty is payable.
Since 100K is less than 127K, no Stamp Duty applies


Interpretation B
Perhaps the "Aggregate Consideration" is actualy 400K, and according to the table above, attracts a rate of 7.5%. However this rate is only payable on the site.
So this gives 100K x 0.075 = 7.5K Stamp Duty.

Can anyone tell me if either interpretation is correct? (It means that a new house attracts significantly less Stamp Duty than a second hand house.)

=============================================================
Have just found the answer at http://www.finfacts.com/fincentre/mortgagecost.htm where they detail a similar example from start to finish. Interpretation A is correct. The "Aggregate Consideration" is the amount liable for stamp duty which is approximately 25% of the total purchase price.

So in short, both the rate of stamp duty and amount liable for stamp duty is determined by the "Aggregate Consideration" rather than the purchase price.