|
|
 |
| Stamp Duty |
|
New Stamp Duty Rates
Residential property transactions which do not exceed the 125,000 exemption level will not attract stamp duty. For amounts not exceeding 1 million, stamp duty at a rate of 7% will be chargeable on the excess over 125,000. Where the transaction exceeds 1 million, the first 125,000 will be exempt, the next 875,000 will attract stamp duty at a rate of 7% and the amount in excess of 1 million will attract stamp duty at a rate of 9%.
In addition, residential properties with a value in excess of 125,000 but not exceeding 127,000 will not be liable for stamp duty.
For example, an investor purchasing a house for 850,000 will pay stamp duty of 50,750, just over 25,750 less than under the old regime, a 34% saving.
Exemptions
The stamp duty exemptions currently available to first-time purchasers and purchasers of new homes will continue to apply. First-time owner-occupying purchasers of residential property and other owner-occupying purchasers of new residential property with a floor area of under 125m² are exempt from stamp duty. Other owner-occupying purchasers of new residential property with a floor area of over 125m² incur stamp duty on the greater of the site value of 25% of the property value (excluding VAT).
These changes will apply to instruments which are required to be presented to the Revenue Commissioners for stamping no later than 5 December 2007. Accordingly, instruments which were executed in the 30 day period prior to 5 December 2007 should benefit from this change.
Claw-back of stamp duty relief
As outlined above, an exemption from stamp duty is generally available for first-time owner-occupying purchasers of residential property and other owner-occupying purchasers of new residential property with a floor area of under 125m². In addition, partial relief is available to owner-occupying purchasers of new residential property with a floor area of over 125m². Currently, these exemptions / reliefs are a clawback where the purchaser rents out the residential property, other than under rend-a-room arrangement, within five years of the date of the deed of transfer relating to the purchase.
The minister has decided to recognise the need to relax the clawback provisions to better reflect the increased career and residential mobility of house buyers and the need to provide them with greater flexibility and certainty in their choices.
He announced a reduction in the claw-back period for all three reliefs from five years to two years for deeds of transfer executed on, or after, 5 December 2007. for deeds of transfer executed before 5 December 2007, to the extent that residential property is rented out on, or after, 5 December 2007, a clawback of relief will not arise where the letting occurs in the third, fourth or fifth year of ownership.
Transfer of a site to a child
The exemption threshold applicable to the conveyance, transfer or lease of a site by a parent to a child for the purposes of constructing thee childs principal private residence has been increased.
With effect from 5 December 2007, the exemption will apply to sites with a market value not exceeding 500,000. (previously 254,000)
Similar changes have been made to the equivalent capital gains tax exemption.
We advise that you seek professional opinion to clarify the above.
Commercial Stamp Duty Changes from 9% to 6%
|
|
|
|
