Stamp Duty Changes in Budget

Stamp Duty Changes in 2011 Budget

The rate of stamp duty on residential property will be changed  to 1% on all properties valued up to €1 million.
A rate of  2% will apply to property valued over €1 million.
Stamp duty on land remains unchanged.

The changes take effect from  8 December 2010

All stamp duty reliefs and exemptions listed below are to be abolished

* • First time buyer relief

* • Exemption for new houses under 125 sq m in size

* • Relief on new houses over 125 sq m in size

* • Consanguinity relief for residential property transfers

* • Exemption for residential property transfers valued under €127,000

* • Site to child relief

Current stamp duty levels are  zero on values below €125,000, 7% on the next   € 875,000  and 9% on the balance .

This means that  First Time Buyers will now pay stamp duty on all house purchases. What may have seemed like a cut – will actually be a big increase for FTbs. Also – on lower priced homes – the removal of the 0% rate on the first €125k  will mean more stamp duty expense for buyers of smaller homes or apartments .

Transitional arrangements will apply where, if as a result of the new rates, a purchaser will pay more stamp duty.
If  sale completes on or after 8 December 2010 and before 1 July 2011 – and  there was a binding contract which had been entered into prior to 8 December 2010 – then the pre Budget rates will be applied.

16 thoughts on “Stamp Duty Changes in Budget

  1. if i bought a house in 2010 in ireland as a first time buyer can i elect to pay stamp duty at 2011 rates. I may look to rent this property which would imply a clawback of stamp duty. Would this be clawed back at 1% or the c 5% which prevailed at the time?

  2. I have just closed the purchase of a house on the 19 of November 2010, does the transitional provision period for stamp duty cover these dates.

    • Derrick – as mentione above – the transitional arrangements say that exemptions apply to ……
      “Instruments executed on or after 8 December 2010 but before 1 July 2011 in respect of binding contracts entered into before 8 December 2010, where the effect of the abolition would be that the stamp duty payable would be higher than it would have been under the pre-Budget position.”

      So if you completed on Nov 19th – you will not be able to reverse the stamp duty.
      For 100% certainty – check with your Solicitor

  3. If a property is over €1m does this mean the first €1m is taxed at 1% and the balance @ 2% or is the full amount taxed at 2%

    • Yvonne – The 125k exemption has gone. Stamp Duty is now payable on all values of residential property. So – people buying cheaper houses will be hit harder. People buying massive homes will be saving thousands. For example – a 1 million house would incur stamp duty of €61250 – under the new rates it will only be €10000

  4. As per Laura’s query above, has the gift tax relief been abolished for parent to child transfer of land? If it has is there any transitional provision in place to deal with tax payers who will stand to lose out?
    I have been offered and have agreed the transfer of ownership of a plot of land but the deeds were to transfer once planning had been obtained (we are currently in the middle of the planning stage).

    • Colin and Laura – The relief on stamp duty on gifted sites has been withdrawn from Dec 8th. If “binding” agreements were in place before Dec 8th and the site is transferred before July 2011 – then you may be able to avoid the duty.
      The exact Revenue wording is ..
      Exception on : “Instruments executed on or after 8 December 2010 but before 1 July 2011 in respect of binding contracts entered into before 8 December 2010, where the effect of the abolition would be that the stamp duty payable would be higher than it would have been under the pre-Budget position.”

      You will probably need to talk to your solicitor about this

  5. I have in the last two weeks closed a sale and signed contracts for house.Due to pay stamp duty this week. Will old or new rates apply?

    • Tara – The new stamp duty rates will apply to property transfers on or after 8 December 2010.
      But – the government have put a transitional provision in place to ensure that anyone who has entered into a binding contract to purchase a residential property before 8 December 2010, and who executes the transfer of that property before 1 July 2011, will not lose out.

  6. is the exemption for gift tax on site from farmer father to father son for building family home gone or is the threshold just reduced?

  7. What are the stamp duty implications in respect of new houses for sale both under and over 125sq m ?

    • James – The new rates apply to all residential property – no more exemptions on size or for FTBs

    • Susan – I have updated the post to clarify that this reduction applies to houses only. The rate for land remains the same (max 9% on values over €150k )

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