Home economics: Sinead Ryan answers your property questions
I was left just over an acre of land by an uncle who died a few years ago. It was part of an old farm, and is zoned as agricultural. I'm city-based and certainly won't be farming it but I have an option now to sell it to a local builder who thinks he can get permission to put a house on it. For me, this is a personal transaction but would I be caught for the new stamp duty rules if I sell it, and what is the capital gains tax (CGT) position?
A. On the second issue, CGT is calculated on the gain or uplift in value of an asset from acquisition to disposal, says Barry Flanagan of Taxback.com.
"If you are selling for more than the land was valued at on acquisition (ie, date of your uncle's death), a gain subject to CGT would occur. If it sells at a reduced cost, a CGT loss would usually be available to carry forward and use against future gains. However, if the land could be sold at a higher value than its 'current use value', it is likely this would be considered 'development land' for CGT purposes. Current use value would be the value of the land assuming it remains agricultural.
On the understanding that the developer you are selling to will develop the land, it seems likely that you will receive more than the land's current use value. This would then be considered development land for CGT purposes and some restrictions of calculating your gain/loss may apply. The main restriction is that you cannot offset any ordinary CGT loss against the gain from the development land; you can only offset losses accumulated from the disposal of other development lands."
This is not DIY territory, to be honest, and if I were you, I would be approaching a solicitor to bed down the contract and a tax accountant to complete the returns. For obvious reasons, Revenue get very sticky about doing the right thing.
The second issue, stamp duty, is also a concern, but it's not yours. Pending confirmation in the Finance Act, the new 6pc rate applies to all non-residential property transactions, and this would most likely qualify. However, the duty is payable by the purchaser, so your buyer has liability for it.
Q. Myself and my family are in the middle of an extension from hell. We're currently living in the house with three small children and our builder has walked out on us, leaving the place in an absolute tip. Unfortunately we have no proper contract with the contractor as he was a friend of my brother-in-law and we completely trusted him. We also fear we've overpaid for the works actually done. Have we any comeback? We're 12 weeks into a 14-week build and still don't have windows to the extension.
A: It sounds very stressful. I think you already know the answer to this one, unfortunately. There really isn't much you can do without a contract, as there is nothing to enforce.
I would start by quantifying the work expected and the work done to date and try to get a handle on its value/cost by getting a surveyor's report.
You could try to appeal to his better nature via your brother-in-law. Perhaps the builder has family problems or an illness which caused him to leave, and this might be addressed soon.
Susan Cosgrove of Cosgrove Gaynard Solicitors recommends you write the builder a formal letter demanding he complete the work and threatening proceedings if not.
You could try to take the case to the small claims court (courts.ie), which costs €25 - you don't need a solicitor.
It may or may not succeed, based on the verbal agreement you had, but if he is doing work elsewhere he won't want a judgement hanging over him.
The maximum you can get in the SCC is €5,000, but your email didn't tell me how much you're out of pocket. A higher court would be very expensive.
In the immediate term, you need the work finished. So do get some quotes, and this time, a contract outlining time, cost and stages of work.
The Ryan Review
Finally, a modicum of good news peeping out from the Central Bank, which is in dire need of a bit of decent press after its less than impressive response to the tracker scandal.
Mortgage lending and debt management are both showing continuing improvement. The first half of 2017 saw €3.05bn loaned out, up a third. Some 93pc of home loans were within the lending limits (banks are allowed derogations on up to 15pc of Loan to Value rules), but this dipped to 80pc for second-time buyers who have a higher ask of 20pc equity.
On the debt side, people continue to pay off loans like credit cards, cars and personal debts (it's all relative though, we're still one of the most personally indebted nations in Europe). The surprising figure is the number of non-mortgaged transactions. It now stands at over a third, which the CB calls 'significant', but not nearly as much as it was before now, with an estimated one in two properties changing hands for cash.
What it all means in a nutshell is a picture of individuals acting responsibly. Borrowing only what they need, paying down debt when they can. One can only surmise it is despite, and not because of, the example of the banks.