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VAT included in offer price???

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  • 11-04-2014 3:16pm
    #1
    KATM
    Registered Users Posts: 69 ✭✭


    Hi everyone,

    I'm looking for a little advice.

    We are in the process of closing a deal on our new home. We offered the market value and were successful.

    As silly as it now seems, we assumed at the time that the market value and therefore our offer were inclusive of VAT. Firstly the house has been let out by the developer for a number of years, so we firstly assumed we were buying a second-hand house - but we have just been informed by our solicitor that the builder's contract lists it as a new-build.

    Can anyone advise whether it's safe to assume that a purchaser's offer usually includes the VAT???

    TIA!
    Tagged:


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    #2
    techdiver
    Registered Users Posts: 3,187 ✭✭✭techdiver


    KATM wrote: »
    Hi everyone,

    I'm looking for a little advice.

    We are in the process of closing a deal on our new home. We offered the market value and were successful.

    As silly as it now seems, we assumed at the time that the market value and therefore our offer were inclusive of VAT. Firstly the house has been let out by the developer for a number of years, so we firstly assumed we were buying a second-hand house - but we have just been informed by our solicitor that the builder's contract lists it as a new-build.

    Can anyone advise whether it's safe to assume that a purchaser's offer usually includes the VAT???

    TIA!

    Yes. The price includes VAT.

    Also, you will only be liable for stamp duty on the VAT exclusive portion of the sale.


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    #3
    ted1
    Registered Users Posts: 23,535 ✭✭✭✭ted1


    KATM wrote: »
    Hi everyone,

    I'm looking for a little advice.

    We are in the process of closing a deal on our new home. We offered the market value and were successful.

    As silly as it now seems, we assumed at the time that the market value and therefore our offer were inclusive of VAT. Firstly the house has been let out by the developer for a number of years, so we firstly assumed we were buying a second-hand house - but we have just been informed by our solicitor that the builder's contract lists it as a new-build.

    Can anyone advise whether it's safe to assume that a purchaser's offer usually includes the VAT???

    TIA!

    unless there is an exception for houses that VAT inclusive order of 1973 states that it must be included

    http://www.irishstatutebook.ie/1973/en/si/0009.html


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    #4
    Woodville56
    Closed Accounts Posts: 1,643 ✭✭✭Woodville56


    techdiver wrote: »
    Also, you will only be liable for stamp duty on the VAT exclusive portion of the sale.

    That's really interesting - didn't know that , thanks techdiver ! So we are buying a new previously unoccupied property at say €100k, the stamp duty will be only due on the vat exclusive cost of the house ?


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    #5
    techdiver
    Registered Users Posts: 3,187 ✭✭✭techdiver


    Woodville56 wrote: »
    That's really interesting - didn't know that , thanks techdiver ! So we are buying a new previously unoccupied property at say €100k, the stamp duty will be only due on the vat exclusive cost of the house ?

    That's correct.

    Say the house is €100,000, the stamp duty is payable on €88105.73.

    So your stamp duty liability will be €881.06.


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    #6
    techdiver
    Registered Users Posts: 3,187 ✭✭✭techdiver


    Also, since it's a new property you will be exempt from the property tax until the end of 2016.

    http://www.revenue.ie/en/tax/lpt/exemptions.html


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    #7
    KATM
    Registered Users Posts: 69 ✭✭KATM


    That has really put my mind at rest - thanks a million techdiver & ted1!

    Good to know about the 1973 order & property tax too!


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    #8
    Victor
    Registered Users Posts: 78,420 ✭✭✭✭Victor


    techdiver wrote: »
    Also, you will only be liable for stamp duty on the VAT exclusive portion of the sale.
    I thought that a property could only be liable to VAT or stamp duty, not both.


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    #9
    KATM
    Registered Users Posts: 69 ✭✭KATM


    Unfortunately not, Victor. On new houses you pay VAT & stamp duty (stamp duty not payable on the VAT element).


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    #10
    TheDriver
    Registered Users Posts: 12,513 ✭✭✭✭TheDriver


    your probably thinking of mid 2000s when there was no stamp duty on new builds.


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    #11
    Kazbah
    Registered Users Posts: 764 ✭✭✭Kazbah


    If it is a self build is Stamp Duty still payable only on the VAT exclusive cost?

    ie that (1% of total site cost) + (€881.06 per €100,000 of build costs)?


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    #12
    Ms.Tea
    Registered Users Posts: 34 ✭Ms.Tea


    Do you really not pay it on the full price of a new build? We recently bought a brand new build and our solicitor charged us the full 1%!


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    #13
    techdiver
    Registered Users Posts: 3,187 ✭✭✭techdiver


    Ms.Tea wrote: »
    Do you really not pay it on the full price of a new build? We recently bought a brand new build and our solicitor charged us the full 1%!

    You are only liable on the VAT exclusive part of the transaction. If the sale price is €200,000 your stamp duty would be €1762.11 (1% of €176211.45).

    If you paid more on a new build your solicitor has made a mistake.


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    #14
    Ms.Tea
    Registered Users Posts: 34 ✭Ms.Tea


    Cheers for that, rang my solicitor & there's a cheque for a nice few bob refund in the post! thanks :)
    techdiver wrote: »
    You are only liable on the VAT exclusive part of the transaction. If the sale price is €200,000 your stamp duty would be €1762.11 (1% of €176211.45).

    If you paid more on a new build your solicitor has made a mistake.


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