As more new properties are coming on stream, it is timely to remind purchasers that their liability for Stamp Duty is limited to the VAT free element of the purchase price. This applies to both newly constructed residential and non-residential properties.
Stamp Duty returns are filed on-line via ROS by the purchaser’s solicitor. It is essential that a solicitor correctly analyses the Contract for Sale (and any Building Agreement) to ascertain if the purchase price includes VAT, and if so, deducts it appropriately.
Example: Joe contracts to buy a new house for €213,500.00. The price structure is divided as follows:
Contract for the Sale (of the site): €100,000.00
Building Agreement (agreement by the developer to build Joe a house on the site): €113,500.00.
The Building Agreement states that the €113,500.00 is inclusive of VAT.
Stamp Duty will be calculated as follows: 1% (residential property) of €100,00.00 (site value) + €100,00.00 building costs (being €113,500.00 less vat @ 13.5%) = €2,000.00
Julie Mullan, solicitor, has extensive experience on all aspects of conveyancing, including residential and commercial properties located all over Ireland.
If you have any questions about conveyancing, Julie can advise you. Please get in touch.