Q&A looks at new development "phases" and stamp duty in the UK.
Phases: Could you explain the business of "phases" when it comes to new apartment developments. I have become deeply suspicious of the whole process. I have been searching for an apartment for over a year now and on one occasion the billboard outside said "first phase sold out" but the agent told me there were in fact some apartments available. In another case only a quarter of the apartments in the first phase were put up for sale and the agent suggested that I bought an apartment in the second phase off the plans which I am not willing to do. It is extremely difficult for a buyer to know what exactly is going on.
While this column can't offer concrete examples of the cynical use of a "sold out" sign, it's hard to believe that there haven't been occasions when an agent selling a large multi-phase development hasn't been a little on the quick side to put up such a sign soon after the launch of the first phase to make the whole scheme appear more attractive (so sales can be made on subsequent phases).
In housing developments that are often launched in relatively small phases, with all houses costing roughly the same, a "sold out" sign is easy to believe. In an apartment scheme, the one-bed on the ground floor is likely to cost a third of the price of the three-bed penthouse so even long after the block is occupied and "sold out" there might be one or two high-priced penthouses still to shift.
If you think about the booking deposit system we have here, it's easy to see why an agent could say that a development was sold out in the first week when in reality all that changed hands might have been a €2,000 booking deposit. Any one of those deposit payers is free to back out and get their deposit back. So a scheme that was "sold out" in week one, could three weeks later have several available apartments.
The picture gets more frustrating in the case of large apartment schemes where only a fraction of the apartments are actually put on the market. It is not unusual for developers to either keep some apartments in a scheme for themselves or to have sold them off prior to the public launch.
Buyers can feel that the scheme is wrongly labelled as being sold out when no one appears to have had a chance to buy. There is no compulsion on developers to offer all apartments for public sale.
Stamp duty in the UK: I intend to buy a property in either Liverpool or Manchester in the near future as an investment - property in those cities are very affordable. I will be spending less than €100,000. Is there stamp duty in the UK on property transactions?
Stamp duty rates in the UK are significantly lower than here. At your price range you will be paying only 1 per cent of the purchase price.
Just in case your budget increases significantly, these are the stamp duty thresholds (in sterling prices): from £60,001 (around €87,050), 1 per cent; from £250,001 (around €362,693), 3 per cent; from £500,001 (around €725,386), 4 per cent.
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Unfortunately, it is not possible to respond to all questions. The above is a representative sample of queries received. This column is a readers' service and is not intended to replace professional advice. No individual correspondence will be entered into.
