Property of the Week
Cape View House, 6 Bed, Goleen, Co Cork, Ireland
Ref:1075
€2,500,000.00
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Tax and Duty Types
Stamp Duty
When does a charge to Stamp Duty arise?
The stamp duties chargeable in Ireland fall into three main categories.
- The first comprises the duties payable on a wide range of legal and commercial documents, including (but not limited to) conveyances of property, leases of property, share transfer forms and certain agreements. The duties in this category are denoted by means of stamps affixed to or impressed on the document affected and, depending on the nature of the document, may be either ad valorem or of fixed amount
- The second category comprises a duty on certain transactions of capital companies. Of the transactions that give rise to a charge to duty the most common are the formation of a limited company and an increase in the issued share capital of a limited company. The rate of capital duty on these types of transactions has been reduced from 1% to 0.5% for transactions effected on or after 2 December 2004.
- The third category comprises duties and levies payable by reference to statements. These duties and levies mainly affect banks and insurance companies and include a duty in respect of financial cards (e.g. Credit, ATM, Laser and Charge cards) and levies on certain insurance premiums and certain statements of interest.
Residential Property
The most common charge to stamp duty which affects individuals is the stamp duty on the purchase of residential property; i.e. houses and apartments.
The amount of stamp duty payable depends on:
i) The price paid (or the market value where the price paid is less than market value) for the property
ii) Whether the property is new or second-hand and
iii) Whether you are a first time buyer, owner-occupier or investor
First Time Buyer
A first time buyer is a person who has not previously purchased or built a house or apartment anywhere in the world and who is purchasing a house or apartment for use as their principal place of residence. Where there is more than one buyer, each of the buyers must be a first time buyer to obtain the reduced first time buyer rate. The benefit obtained where the reduced first time buyer rates apply is subject to clawback provisions. Additional information may be found here
The rates of duty for first time buyers have been reduced for deeds of conveyence or transfer executed on or after 2 December 2004 (see table below)
Rates of Duty for Residential Property
The rates of duty applicable for residential property (whether new or second-hand) are as follows:
Aggregate Consideration |
First Time Buyer Rate Pre 2 December 2004 |
First Time Buyer Rate On/After 2 December 2004 |
Full Rate |
Less than €127,000 |
Exempt |
Exempt |
Exempt |
€127,001 - €190,500 |
Exempt |
Exempt |
3% |
€190,501 - €254,000 |
3% |
Exempt |
4% |
€254,001 - €317,500 |
3.75% |
Exempt |
5% |
€317,501 - €381,000 |
4.5% |
3% |
6% |
€381,001 - €635,000 |
7.5% |
6% |
7.5% |
Over €635,000 |
9% |
9% |
9% |
N.B. The Rates above apply to the entire consideration or value of the property, e.g. :
(a) Where the consideration for a property is €150,000 (and the purchaser is not a first-time buyer) the stamp duty liability would be €4,500 (€150,000 @ 3%)
(b) Where the consideration for a property is €350,000 (and the purchaser is not a first time buyer) the stamp duty liability would be €21,000 (€350,000 @ 6%)
(c) Where the consideration for a property is €350,000 and the purchaser IS a first time buyer (where the deed of conveyance is executed on or after 2nd December 2004) the stamp duty liability would be €10,500 (€350,000 @ 3%)
New Houses and Apartments
· Under Floor Area of 125 sq. m
New houses or apartments which are purchased by an owner occupier (including a first-time buyer) where there exists a valid floor area compliance certificate issued by the Department of Environment and Local Government stating that the total floor area of the house/apartment does not exceed 125 square metres are exempt, subject to clawback.
· Over Floor Area of 125 sq. m
New houses or apartments which are purchased by an owner occupier (including a first time buyer) where the total floor area exceeds 125 square metres are charged with duty, at the appropriate residential property rate as per the table above, on the site value (excluding VAT) or one quarter of the total value of the house including the site (excluding VAT), whichever is the greater, subject to clawback. The size of the floor area must be certified by a qualified architect, engineer or surveyor.
· Clawback
A clawback arises if rent is obtained from the letting of the house or apartment for a period of 5 years from the date of the conveyance or transfer, other than under the rent-a-room scheme. The clawback amounts to the difference between the higher stamp duty rates and the duty paid and it becomes payable on the date that rent is first received from the property. A clawback will not arise where the property is sold to an unrelated third party during the 5-year period.
· Rent-a-room-scheme
Under this scheme there is no clawback of the first time buyer or owner occupier reliefs where rent is received by the person in occupation of the house or apartment, on or after 6 April 2001, for the letting of furnished accommodation in part of the house or apartment.
· Investors
New houses or apartments (whether under or over a floor area of 125 sq. m) which are purchased by investors are charged to duty on the entire price paid (exclusive of VAT) for the house or apartment.
Sites
- Where an individual purchases a site in connection with,or as part of,an arrangement to build a house or apartment on that site then stamp duty will be charged, subject to the reliefs referred to above, based on the aggregate amount of the site cost and the building cost at the appropriate residential property rate.
- Where an individual purchases a site with no connected agreement to build a house or apartment, the transfer of the site is chargeable at the non-residential rates in the table below.
- The transfer of a site from a parent to child is exempt from stamp duty where the site transfer is for the purpose of constructing a house which will be the child’s main residence and where the value of the site does not exceed €254,000.
Stamp Duty on Non-Residential Property
Non-Residential Property is basically any property other than residential property, stocks or marketable securities or policies of insurance. It includes (but is not limited to) sites, offices, factories, other business premises, shops, public houses,land and goodwill attaching to a business.
The following rates are applicable to non-residential property:
Aggregate Consideration |
Rate of Duty |
Up to €10,000 |
Exempt |
€10,001 to €20,000 |
1% |
€20,001 to €30,000 |
2% |
€30,001 to €40,000 |
3% |
€40,001 to €70,000 |
4% |
€70,001 to €80,000 |
5% |
€80,001 to €100,000 |
6% |
€100,001 to €120,000 |
7% |
€120,001 to€150,000 |
8% |
Over €150,000 |
9% |
Leases
A lease is chargeable to stamp duty on both the premium (or fine) and the rent payable under the lease.
The duty chargeable on the premium is at the rate for residential or non-residential property as appropriate (as per tables above).
The duty on the rent is as follows
Residential & Non-Residential Property |
Rate |
Lease for a term not exceeding 35 years or for any indefinite term |
1% of the average annual rent |
Lease for a term exceeding 35 years but not exceeding 100 years |
6% of the average annual rent |
Lease for a term exceeding 100 years |
12% of the average annual rent |
A lease of a house or apartment for a term not exceeding 35 years or for any indefinite term and where the rent does not exceed €19,050 per annum is exempt from stamp duty.
ALL INFORMATION ON THIS PAGE IS SUBJECT TO CHANGE. PLEASE REFER THE "REVENUE COMMISIONERS" WEBSITE (WWW.REVENUE.IE) FOR THE LATEST UPTO DATE IMFOMATION.