Stamp query on house > 125 m2

F

Formosa

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I am in process of closing on my house purchase ( traded up to this new house, owner occupier).

Cost €500,000
Site element €250,000

SD payable on greater of :
1/4 of total (exc VAT)
or the site value (exc VAT).

That is 250,000 / 1.135 = 220264.31 less 125,000 = €95,264.31 @ 7% = SD payable of €6,668.50.

Is this right? My solicitor is telling me I can't take the VAT off first, and she is telling me I owe €125,000 @7% = €8,750.

I'm almost sure she is wrong but can't find it now on the revenue site or elsewhere.

Can anyone direct me to somewhere so I can point out to her what the actual rule is.
 
Have just found this on the revenue site, think it is fairly clear:


Over Floor Area of 125 sq. m
New houses or apartments with a floor area greater than 125 square metres, which are purchased by an owner occupier are charged with duty on either the site value (excluding VAT) or one quarter of the total cost of the house and site (excluding VAT), whichever is the greater figure.
 
There is usually no VAT element on the cost of the site, only on the cost of the building work by the builder so your solicitor is correct.
 
Formosa,

You need to check with developer of house if site element includes or excludes VAT. If it includes VAT then i think you can deduct this @13.5%before paying stamp duty.
 
FKH said:
There is usually no VAT element on the cost of the site, only on the cost of the building work by the builder so your solicitor is correct.
Click to expand...

This is incorrect. Vat is included,generally speaking,in the price for the site although it is not always all that clear in the standard contract for the site.

I have always, as a solicitor, calculated the stamp duty liability by deducting the vat from the total. On occasion the Revenue query this (because its not clear from the site contract) even when I point out that to the best of my knowledge due to changes some years ago in the vat legislation vat has to be charged on the site element where it is directly connected to a building agreement.(I cannot tell you when or in what Finance Act this was done but it was done to close a loophole in the vat code).Inevitably if this issue arises with the Revenue I go back to the developers solicitors and ask for a vat invoice confirming my position, this has never been a problem and then after showing this to the Revenue all is sorted.

Simple thing to do would be to get your solicitor to get developers solicitor to confirm that vat is included in the site element and to furnish the appropriate vat invoice on closing.I imagine your solicitor has met with the same problems as I have with the Revenue in the past and then he/she assumed that the Revenue were correct.
 
Along the same lines recently I've found Revenue to look for an express condition in the contract including VAT.
 
I have had claims that the site price includes VAT rejected by the Revenue and now always quote the slightly higher stamp duty payable. Otherwise you can be stuck chasing the client for the balance payable.
 
FKH said:
I have had claims that the site price includes VAT rejected by the Revenue and now always quote the slightly higher stamp duty payable.
Click to expand...

..even if VAT was included in the site price and your client ends up paying more then he / she should?
 
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