Stamp duty: what if I've just bought?

BUYERS who have signed contracts on second-hand homes in recent weeks may be entitled to avail of the lower stamp duty rates introduced in the Budget on Tuesday.

Their entitlement will depend on whether the contract on the property has been closed. If the sale isn’t closed there is a transitional arrangement in place that allows them to avail of new stamp duty rates.

According to Revenue, “a transitional arrangement applies to anyone who has entered into a binding contract prior to December 8th where the sale is closed on or after December 8th, 2010 and before July 1st, 2011.”

First-time buyers who have signed a contract but have not closed the sale are eligible to avail of the pre-Budget situation and not pay stamp duty. To avail of this, the sale of the property must be closed before July 1st, 2011.

There appears to be some confusion among buyers about the new regime and estate agent Keith Lowe of Douglas Newman Good says his office has been deluged with queries, mostly from first-time buyers .

“They are mainly from people who have signed contracts on new homes recently and were concerned that they would have to pay stamp duty. We were happy to tell them that this is not the case.”

Solicitor Pat Igoe says he has been busy answering phone calls from people who recently signed contracts on property. He says the date of closing is “when the sale is completed, all documents of title are handed to the purchaser’s solicitor, the keys handed over, all searches made and answered by the vendor’s solicitor and all monies paid.

“The purchaser now has the house. The vendor is trespassing if still in the house even five minutes after closing.

“If the sale is already closed this week or last week, there is no room for ambiguity.”

Pat Igoe’s view that those who closed on second-hand properties in recent weeks at the higher rate of stamp duty shouldn’t be too disheartened may bring cold comfort.

“It’s not as awful as it seems. I think that it’s reasonable to assure people who closed in recent weeks that the prices they paid for their property reflected to some degree the depressing effect on prices of the stamp duty regime on the market. With the new regime one assumes the market will be less distorted and prices will begin to take off.”