Contract For Sale, conditions, the 2001 (Revised) edition.
"Condition 47 gives the purchaser a right to inspect the property on a reasonable number of occasions and at reasonable times prior to the closing of the sale. Thus, if the purchaser wishes to inspect the property on the day of the closing, he has a right to do so under this condition"
Has an Architect or Engineer/Surveyor looked at the house to see that it is structurally sound?
If it is a small development, how can you be sure that the developer will finish the roads?
Will the title deeds be in order?
What about the Planning Permission? Are there any difficulties with the conditions on the planning permission? Serious problems could arise later on if you tried to sell the house and the conditions on the original Planning Permission have not been fulfilled.
Discuss your budget with us. Have you allowed for the cost of insurance, Mortgage Protection Policy, Stamp Duty, Registration Fees, Surveyors Fees, Legal Fees and VAT?
Have you enough money of your own to pay the deposit?
What exactly is a Mortgage? We won't sell you one, but we will tell you what it is all about. Could the Bank sell your house?
Do you need to pay a Booking Deposit? To Whom? Is it safe?
What is a Snag List? We will tell you when this should be prepared. We will not part with your money before the house is right for you.
RENT TO BUY SCHEME:
With sale very slow, some developers will suggest to an interested buyer that the buyer lives in the house before deciding to purchase.
Usually the buyer will sign up a contract now for a fixed price with a closing date in say 1 year, 2 years or 3 years. The buyer pays a deposit, usually non-refundable and also signs a Letting Agreement and pays the usual residential rent.
If the buyer exercises the option later on to buy the property a percentage of the rent, possibly up to 100% depending on your negotiations, mgiht be allowed against the purchase price and so all the rent you have paid in not "lost".
Checking the wording of the contract carefully to see whether you are obliged to go through with the purchase or whether you can decide not to go through with the purchase after say 2 or 3 years.
Tax Considerations:
VAT
* On the deposit VAT is charged at 13.5%
* On the rent - if market rent - no VAT.
* The developer would have to pay some VAT to the Revenue i.e. the Revenue claw backsome of the VAT previously reclaimed by the developer.
* If you proceed to buy the property VAT is charged on the purchase price in the usual way.
Stamp Duty:
* The Revenue have issued guidelines to say that if you occupy the property and subsequently buy it, the property will be regarded as a new property for stamp duty relief purposes
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Contact: Donal O’Connor
Email address:
info@johnasinnottsolicitors.ie
Telephone: +353 53 9233111
Fax: +353 53 9233042