Stamp Duty Rates

Stamp duty is a key additional expense when buying a property so it’s important to understand how it works and to take into account when planning your finances. Stamp duty is a tax that you pay to the government when changing documents on a property. The level of stamp duty depends primarily on the type of property you are purchasing.

Commercial Property

Consideration

Up to € 10,000                                           Exempt

€10,001 – €20,000                                     1%

€20,001 – €30,000                                     2%

€30,001 – €40,000                                     3%

€40,001 – €70,000                                     4%

€70,001 – €80,000                                     5%

Over  €80,000                                             6%

Residential Property

Consideration

First Time Buyer New & S/H houses

Other Buyers/Investors in new houses less than 125 sqm

Other Buyers/Investors in new houses more than 125 sqm

Up to €1m

1%

1%

1%

Over €1m

2%

2%

2%

Budget 2011

Budget 2011 – Significant reform of the stamp duty regime for residential property

In his Budget 2011 speech on 7 December 2010, the Minister for Finance announced that stamp duty on purchases of residential property is to be reduced to 1% (but a 2% rate will apply to any consideration in excess of €1m). The Minister also announced the abolition of existing residential property reliefs and exemptions.

Analysis

The Budget brings good news for the majority of house buyers (including investors) as it reduces the rate of stamp duty on purchases of residential property to just 1% (with any excess above €1m chargeable at 2%). This is a significant reduction from the current progressive rates of stamp duty on purchases of houses and apartments where the first €125k is chargeable at 0%, the next €875k at 7% and the balance (over €1m) at 9% and should, hopefully, inject some life into the housing market.

There is, however, a sting in the tail as it is also proposed that the existing reliefs and exemptions for purchases of residential property are to be abolished. These include first time buyer relief, under which first time buyers pay no stamp duty on the acquisition of a principal private residence, the relief for purchases of new property by any owner-occupier, the exemption for purchases of property for €127,000 or less, the relief for the transfer of a site to a child and the 50% relief for transfers of residential property between relatives.

The new stamp duty rates will apply to any conveyances or transfers executed on or after 8 December 2010. Transitional measures will be put in place to ensure that any purchaser who has contracted to buy residential property before 8 December 2010 and who completes the purchase by 1 July 2011 will not end up paying more stamp duty than they would under the existing rules.

No changes are proposed to the rates of stamp duty on commercial property (top rate 6%) or stocks and marketable securities (1%).