When does stamp duty have to be paid

J

jpa

Guest
After closing the purchase of a house, when does stamp duty have to be paid ? Does it all have to be paid in one lump sum or can it be staged ?

Would I be correct in assuming that borrowers often include the stamp duty cost when considering how much they have to borrow and how much house they can afford ?
 
As far as I know you have to pay the stamp duty in one lump sum. Think it was about 4-6 weeks after we moved in that we evenutally paid it - your solicitor will tell you when it has to be paid.

As for your second question, it has to be considered when thinking about what you can afford. Stamp duty will add €13000 to a €260000 house - it is not included in the house price.
 
jpa said:
After closing the purchase of a house, when does stamp duty have to be paid ?
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Within 28/30 days

Does it all have to be paid in one lump sum or can it be staged ?
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One lump sum. Even though not technically payable immediately, if you are getting a mortgage, your solicitor has a personal undertaking to your lender to make sure the stamp duty is paid so that the Deed and the Mortgage can be registered. In practice, the solicitor needs to be in funds with the stamp duty on the day of closing and before parting with your mortgage cheque.
If the purchase is a cash purchase, it is your responsibility to pay the stamp duty within the time. However, in practice, most solicitors will require to eb in funds on the day of closing to avoid having to chase the client.

Would I be correct in assuming that borrowers often include the stamp duty cost when considering how much they have to borrow and how much house they can afford ?
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Until today when apparently you can borrow up to 120% of the price of your house, you could only borrow approx. 92% max of house value i.e. no reference to stamp duty and you had to find the balance deposit and stamp duty yourself.
Stamp duty is an added cost when purchasing and you must factor it in when doing your sums on affordability

mf
 
What do you mean you can now borrow up to 120% of the price of your houes. 100% mortgages i understand but 120%? can you clarify? thanks.
 
Check out the news today....120% mortgages are on their way. Financial Regulator said they will not stand in the way of banks who want to introduce them!
 
doesnt that mean you owe more then the house is worth? how can that be good? or am i missing something?
 
mf1 said:
Within 28/30 days



One lump sum. Even though not technically payable immediately, if you are getting a mortgage, your solicitor has a personal undertaking to your lender to make sure the stamp duty is paid so that the Deed and the Mortgage can be registered. In practice, the solicitor needs to be in funds with the stamp duty on the day of closing and before parting with your mortgage cheque.

If the purchase is a cash purchase, it is your responsibility to pay the stamp duty within the time. However, in practice, most solicitors will require to eb in funds on the day of closing to avoid having to chase the client.
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As I have it also ...

Any idea why we don't get paid interest from our solicitors, when we pay over the stamp duty on the date of acquisition, but they subsequently dont pay it on our behalf for a further 28 days ? ... anyway we can confirm when stamp duty is paid etc ? (potential for a nice little earner for some solicitors here, me thinks ;))

Regards


G>
http://www.rpoints.com/newbie
 
Ah yes, I was waiting for that one.

Most of us get a Bank Draft from the client payable to Revenue and most of us stamp the Deed straight away. On a Registry of Deeds title, the date of stamping is very evident. In Land Registry cases, less so as the Transfer Deed is filed in the Land Registry.

Also most solicitors do not have the time, inclination or resources to play around with clients funds for stamp duty because of the reasonably short period of time within which the duty has to be paid.

Think what you will - it generally is simply not the case and the amounts involved are too miniscule to make such an exercise even remotely profitable for most of us.

mf
 
Could Stamp Duty also be deducted from the sale of your existing property ?
I do not think many people would have 22,500 cash up front for, say, a 375k house.
 
Stamp duty is payable on a purchase and most people will be financing a purchase through a combination of loans, mortgages, savings and/or sale proceeds. If you are buying before selling, then there is no way around having to borrow the stamp duty - no solicitor should leave themselves exposed on a personal undertaking by agreeing to close a purchase with a loan cheque when not in funds to stamp and register the Deed.

Say what you will, its unfair, its hard, its mean but once you've been in business long enough and seen enough clients let you down on solemn promises, you never again take a risk.

mf
 
mf1 said:
Ah yes, I was waiting for that one.

Most of us get a Bank Draft from the client payable to Revenue and most of us stamp the Deed straight away. On a Registry of Deeds title, the date of stamping is very evident. In Land Registry cases, less so as the Transfer Deed is filed in the Land Registry.

Also most solicitors do not have the time, inclination or resources to play around with clients funds for stamp duty because of the reasonably short period of time within which the duty has to be paid.

Think what you will - it generally is simply not the case and the amounts involved are too miniscule to make such an exercise even remotely profitable for most of us.

mf
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Hi

Appreciate the comments, sorry did you realise you were in pratice (was not a personal dig).

I must admit, I suspect some solicitors are infact benifiting, as suggseted above though :)

Cheers

G>
http://www.rpoints.com/newbie
 
Just to give you the technically correct answer to your question, stamp duty is payable within 30 days of execution of the deed of transfer. The Revenue Commissioners state in their guidance notes that, in practice, they will allow a further 14 days grace before they will impose interest and penalties. But as, traditionally, the solicitor pays over the stamp duty on your behalf, I suppose the time you have to pay the stamp duty is when he/she looks for it from you.
 
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