The Money Doctor: Stamp-duty clawback
Q My father bought an apartment for €310,000 four years ago in my name.
Being a first-time buyer, I was exempt from stamp duty. I lived in it for the first year but then moved back home and let it out. I have been informed that I have to pay a stamp-duty clawback of €12,950 because I let the apartment. Is this true?
STEVE, DUN LAOGHAIRE
A It is true. Even for new-build apartments, letting these properties within the first two years incurs a stamp-duty clawback. Even if you only let the property in the 52nd week of the second year, the FULL clawback will apply. There is also the possibility of penalties and interest. If you were to leave the property unoccupied for the full two years, then no clawback will be payable.
There are currently three categories of stamp duty: if the property costs less than €125,000, there is no stamp duty. From €125,000 to €1m, stamp duty is at 7pc. Over €1m, the stamp duty rate is 9pc.
Q CAN you let me know what are the criteria to be eligible for affordable housing. Does my salary of €38,000 qualify me? I’m a single woman and live in Dublin. Thanks.
A The affordable housing scheme is essentially for those who would be paying more than 35pc of their net disposable incomes (NDI) on their mortgage repayments. It relates to newly constructed properties being bought by qualified applicants at a significant discount. To qualify you must be:
- On your local council's affordable housing panel
- In full-time employment
- In a position to secure a mortgage necessary to buy a property if offered
- Living or working in your local council area
- In need of affordable housing.
Mortgage terms are 20, 25 or 30 years, income must be less than €40,000, or for a joint application less than €100,000. Repayments can be as little as €800 per month — 95pc mortgages are available.
A full clawback will occur if you sell within 10 years and on a sliding scale up to 20 years.
Application forms for the panel are available from the Affordable Housing Unit, call 01 222 5020 or email affordablehousing.unit@dublin city.ie. or www.dublincity.ie