The Minister for Finance announced major changes in relation to stamp duty on residential properties in the Budget on the 7th December 2010.
New Rates for Residential Property (as and from the 8th December, 2010)
A new lower rate of 1% will apply to purchases/Transfers where the price/value attributable to residential property does not exceed €1,000,000. A higher rate of 2% will apply to the excess of the price/value over €1,000,000. In conjunction with the introduction of the lower rate of 1%, which will apply to the entire amount of the consideration up to €1,000,000, the current exempt threshold of €127,000 has been abolished.
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Aggregate Consideration
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Rate of Duty
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First €1,000,000
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1%
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Excess over €1,000,000
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2%
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The above rates come into effect on all residential property transactions executed on or after the 8th December, 2010, with the exemption of certain transactions where the transitional arrangements will apply.
The transitional arrangements will apply where, as a result of the new rates or the termination of the reliefs or exemptions, a taxpayer is disadvantaged compared to the stamp duty treatment applicable prior to the 8th December 2010. The transitional arrangements will apply where an instrument is executed on or after the 8th December 2010 and before the 1st July 2011 solely in pursuance of a binding contract which had been entered into prior to the 8th December 2010.
Relief and Exemptions abolished
The following reliefs and exemptions have been abolished as and from the 8th December, 2010;
· Section 83A of the Stamp Duties Consolidation Act 1999 – this exemption applied where a site was transferred by a parent to a child for the purpose of building a house for occupation by the child.
· Section 91A of the Stamp Duties Consolidation Act 1999 – this exemption applied to the purchase by an owner-occupier of a new house or apartment where the floor area did not exceed 125 square metres.
· Section 92 of the Stamp Duties Consolidation Act 1999 – this relief applied to the purchase by an owner-occupier of a new house or apartment where the floor area exceeded 125 square metres.
· Section 92B of the Stamp Duties Consolidation Act 1999 – this exemption applied to a first time purchaser who acquired a house or apartment for owner-occupancy.
· Consanguinity Relief provided for under Schedule 1 of the Stamp Duties Consolidation Act 1999 – this relief will no longer apply to residential property but will continue to apply to non-residential property.