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Property Transactions

We believe that it is our function in acting for either a purchaser/seller of property whether residential or commercial to ensure that the transaction is concluded as quickly and as efficiently as possible. We have found that clients whether purchasing or selling property have two main questions:-

  1. How much will it cost?
  2. What actually happens in buying/selling property?

1. Costs and Outlay

Prior to incurring any costs or outlay we will advise and explain what they will be. The two main outlays payable by a purchaser are stamp duty and registration fees.

Set out below are the rates of stamp duty applicable to residential and non-residential property for the year 2011.

N.B. Where applicable, VAT should be excluded from the chargeable consideration prior to applying the appropriate rate of stamp duty.

Rates for Residential Property 

A new lower rate of 1% will apply to instruments where the considerable attributable to residential property does not exceed €1,000,000.  A higher rate of 2% will apply to the excess of the consideration over €1,000,000.  In conjunction with the introduction of the lower rate of 1%, which will apply to the entire amount of the consideration up to €1,000,000, the current exempt threshold of €127,000 has also been abolished.

 

Aggregate Consideration               Rate of Duty

First €1,000,000                           1%

Excess over €1,000,000                 2%

 

Apportionment

In the case of a mixed property the consideration must be apportioned, as provided for in section 45(2) or section 52(5) of the Stamp Duties Consolidation Act 1999, on a just and reasonable basis between the residential and non-residential elements of the property.

A surcharge can arise under section 16 of the Stamp Duties Consolidation Act 1999 where the apportionment is not just or reasonable.

 

Aggregation

Aggregation continues to apply in determining the stamp duty liability where a transaction forms part of a larger transaction or of a series of transactions involving residential property.  The stamp duty liability is calculated on the basis of the aggregate consideration for the entire residential property and the duty is then apportioned between the separate property which are transferred by separate instruments and the apportionment is pro rata to the consideration for each property.

 

Relief and Exemptions abolished

The following reliefs and exemptions have been abolished.

  • Section 83A of the Stamp Duties Consolidation Act 1999 - this exemption applied where a site was transferred by a parent to a child for the purpose of building a house for occupation by the child.
  • Section 91A of the Stamp Duties Consolidation Act 1999 - this exemption applied to the purchase by an owner-occupier of a new house or apartment where the floor area did not exceed 125 square metres.
  • Section 92 of the Stamp Duties Consolidation Act 1999 - this relief applied to the purchase by an owner-occupier of a new house or apartment where the floor area exceeded 125 square metres.
  • Section 92B of the Stamp Duties Consolidation Act 1999 - this exemption applied to a first time purchaser who acquired a house or apartment for owner-occupier.
  • Consanguinity Relief provided for under Schedule 1 of the Stamp Duties Consolidation Act 1999 - this relief will no longer apply to residential property but will continue to apply to non-residential property.

 

Effective Date

The above changes will apply to instruments executed on or after 8th December 2010 subject to the transitional arrangements referred to below.

 

Transitional Arrangements

Transitional arrangements will apply where, as a result of the new rates or the termination of the reliefs or exemptions, a taxpayer is disadvantaged compared to the stamp duty treatment applicable prior to 8th December 2010.  The transitional arrangements will apply where an instrument is executed on or after 8th December 2010 and before 1st July 2011 solely in pursuance of a binding contract which had been entered into prior to 8th December 2010.

 

Contact Details

Enquiries regarding the stamp duty should be made to:

Patrick Donaghy

patrick@donaghys.ie

Shane Keane

shane@donaghys.ie

 

Non Residential Rates
Aggregate Consideration

Rate of Duty

Not exceeding €10,000.00

Exempt

€10,001 - €20,0001%
€20,001 - €30,0002%
€30,001 - €40,0003%
€40,001 - €70,0004%
€70,001 - €80,0005%
Over €80,000   6%
  
  
  

2.   What Happens from Start to Finish.

Set out below is a brief description of what happens if you are purchasing or selling a property.

Purchaser

  1. You have the property surveyed.
  2. You obtain loan approval.
  3. You pay the booking deposit to auctioneer.
  4. We examine the terms of the Contract, the Title to the property and any other relevant matters relating to the property.
  5. You sign the purchase Contract.
  6. You pay the balance of the deposit.
  7. We raise further standard queries to clarify the full extent and nature of the property being purchased.
  8. Contemporaneously either before or with the execution of the Contract we attend to your lending institution’s legal requirements to ensure that your loan cheque is available on the closing date.
  9. You carry out a final inspection/meter readings/prepare a snag list.
  10. We complete the purchase.
  11. We stamp and register your purchase deed and any mortgage and then forward all Title documents to your lending institution.

Vendor

  1. We obtain your Title deeds.
  2. Your auctioneer confirms the sale details to us.
  3. We issue a Contract to the solicitor for the purchaser.
  4. We deal with any queries that may be raised by the purchaser’s solicitors.
  5. We complete the sale.
  6. We discharge any outstanding mortgages and account for the balance proceeds to you.