Declan Noonan & Associates

Introduction

Stamp duty is charged on the instruments used in the transfer of property – that is, on the conveyance documents that transfer ownership of the property. In general, the only factor affecting the amount of stamp duty is the value of the property.

Stamp duty applies to residential property such as houses or apartments. It is also payable on non-residential property, that is, land or housing sites without residential buildings – see ‘Rates’ below. If your agreement to buy a site is linked to a construction contract, stamp duty may be payable on the full amount of the site plus the construction contract

Rules

Residential property

A simplified stamp duty system was introduced on 8 December 2010 – see ‘Rates’ below. Before that date there was a complex system of exemptions and reliefs for stamp duty on residential property. These earlier rules are summarised in ‘Further information’ below.

For people buying their homes under local authority tenant purchase and similar schemes, a maximum amount of €100 is charged in stamp duty.

Transfers between spouses, civil partners and cohabitants

In general, the following transactions are exempt from stamp duty:

• All transfers/leases of property between spouses and civil partners (unless the transfer is a subsale – a sale carried out within the process of a larger sale)
• Property transferred between former spouses/civil partners under a court order, following a divorce or the dissolution of a civil partnership
• Property transferred by a cohabitant to his or her cohabitant, on or after 1 January 2011, under a Property Adjustment Order

While the above transactions are in general exempt from stamp duty, the exemption does not apply if any other person is a party to the instrument.

Consanguinity relief

In the case of non-residential property, stamp duty is payable at half the normal rate applicable if there is a transfer of property (other than shares) to certain relatives – for example, a parent, grandparent, step-parent, child, brother, sister, half-brother, half-sister, aunt, uncle, niece or nephew. This consanguinity relief is not available on leases or on transactions involving cousins and/or in-laws. It will cease after 31 December 2014.

For residential property, consanguinity relief was abolished since 8 December 2010.

Clawback of stamp duty relief

A stamp duty clawback arises where rent, other than under the Rent a Room scheme, is obtained within the 2-year period (or up to the date of a sale during this period) from the date of the purchase deed. The amount of the clawback is the difference between (a) the stamp duty payable at the higher rates which would have applied at the date of the purchase deed and (b) the lower duty (if any) paid as a result of getting the benefit of reduced stamp duty rates.

Under the Rent a Room scheme, there is no stamp duty clawback where rent is received by the person in occupation of the house or apartment on or after 6 April 2001 for letting of furnished accommodation in part of the house.

Farm consolidation relief

This relief was for farmers who sold some agricultural land and bought more in order to consolidate their holdings and improve the viability of their farms. It is no longer applicable.

Rates

Residential property

Exceptions

For people buying their homes under local authority tenant purchase and similar schemes, a maximum amount of €100 is charged.

There is no stamp duty payable on certain transfers between spouses, civil partners and cohabitants – see above.

Non-residential property

Since 7 December 2011 there is a single rate of 2% on all non-residential property and the first €10,000 is no longer exempt from stamp duty.

How to apply

Your solicitor will calculate how much stamp duty is due and request this from you before the sale is closed. The amount is paid to the Revenue Commissioners, who place a stamp on the property deeds. Without this stamp, the deeds cannot be registered.

Further information

Residential property: before 8 December 2010

Before 8 December 2010, the amount of stamp duty payable varied according to the value of the property (home or apartment, land or housing site) and your status (first-time buyer, investor, etc.). Stamp duty was divided up into different categories and rates and the amount you had to pay depended on your particular circumstances.

First-time buyer exemption

Up to 8 December 2010, first-time buyers who were owner-occupiers of new and second-hand residential property did not pay stamp duty. As a divorced or separated person, you could be considered a first-time buyer if you met certain conditions.

Non-owner-occupiers and investors

People who rent out new or second-hand houses or apartments are considered investors. Under the rules in force up to 8 December 2010, the same rates of stamp duty applied to investors as to non-first-time owner-occupiers.

Other exemptions and reliefs

• Owner-occupiers of new houses/apartments were exempt from stamp duty, provided that the area of the house or apartment did not exceed 125 sq. metres and a Floor Area Compliance Certificate had been issued
• If the area of the house or apartment was greater than 125 sq. metres, some stamp duty was payable if the Chargeable Consideration was above the relevant exemption threshold
• You did not have to pay stamp duty when buying a property for less than €127,500
• Stamp duty did not apply where a parent transferred a site to a child, subject to certain conditions