Stamp Duty

Under the stamp duty system, there is an exemption of €125,000 with two rates of 7% and 9%. The 7% applies up to €1,000,000 and it is charged on the excess over the exempt limit of €125,000. The 9% rate applies where the amount exceeds €1,000,000. Stamp Duty Rates effective from 5th November, 2007

About Stamp Duty:

Stamp duty is one of the key additional expenses when buying a home so it ’s important to understand how it works and to take into account when planning your finances.

What is stamp duty?

Stamp duty is a tax that you pay to the government when changing documents on a property. These documents specify ownership of the property.

What rate of stamp duty do I need to pay?

The level of stamp duty applicable to you depends primarily on the type of property you are purchasing and your status as a property buyer. So for example, different rates will apply to new and second-hand homes for first-time buyers, second or subsequent time buyers or investors. The value of the house, apartment, land or status and your buying status determinesthe amount of stamp duty that is payable. Stamp duty is divided up into different categories and rates and the amount you pay will depend on:

• Buyer Status: Whether you are a first-time buyer, an owner occupier or an investor
• Plans: Whether you plan to live in the property as your primary residence
• Property Type: New or Second-hand
• Floor Area: The size of the property

Stamp Duty Rates on New Homes:

First-time Buyers:
There is no stamp duty for first-time buyers on any new homes so long as it is your main residence and you are not purchasing the property to rent it out as an investor.

Other Buyers:
For all other owner-occupiers* the stamp duty rate on new homes depends on the floor area of the property. There is no stamp duty on new homes for owner-occupiers if the floor area is less than 125 sq metres.

Other owner-occupying purchasers of new residential property over 125m2 are liable to stamp duty on the greater of the site value or 25% of the property value (excluding VAT) at the standard rates, thresholds and exemption.

Stamp Duty Rates on Second-Hand Homes

First-time Buyers:
There is no stamp duty for first-time buyers of second-hand homes.

Owner Occupiers/Investors:
The following stamp duty rates apply to Owner-occupiers/Investors of second-hand homes:

What is meant by Clawback Period?

A clawback on exemption come about if rent is received from the letting of the house or apartment within a period of 2 years from the date of the conveyance or transfer, other than under rent a room arrangements. The clawback is the difference between the higher stamp duty rates and the duty paid and is payable on the date that rent is first received from the property. A clawback will not arise where the property is sold to an unrelated third party during the 2-year period.

Stamp Duty Rates on Lands/Sites:

It is important to note here that there is no reduction in stamp duty rate on the purchase of land or sites. The same rates apply to all buyer types.

Stamp Duty FAQ's

When do I pay stamp duty?
The payment of stamp duty is usually arranged by your solicitor when you are closing the sale. Without the stamp the deeds for the property cannot be registered.

Who do I pay?
Stamp duty is payable to the Revenue Commissioner.

Are there any exceptions to the rules?
Yes. There are a number of exceptions:

• Transfer of property between relatives
  Stamp duty is payable at half the normal rate applicable if there is a transfer of property (other than shares) to certain relatives (e.g., a parent, grandparent, step-parent, child, brother, sister, half-brother, half-sister, aunt, uncle, niece or nephew). This relief is not available on leases or on transactions involving cousins and/or in-laws.
• Site transfers from parent to child
  Stamp Duty and Capital Gains Tax do not apply where a parent transfers a site to a child. The site must be for the construction of the child's principal private residence and the market value of the site must not greater than 500,000 euro. A parent can only transfer one site to each child to take advantage of this exemption. If the child then sells the site without the principal private residence being built and lived in for 3 years, there will be a clawback of the capital gains tax relief permitted. There will be no clawback if the child dies.
• Stamp duty relief for exchange of farmland for farm consolidation purposes
  The Finance Act 2005  provided a new stamp duty relief for an exchange of farmland between two farmers. This applies when farmers exchange land in order to consolidate their holdings. The stamp duty is applied to the difference in value between the lands concerned. Formerly each farmer was liable to the full stamp duty on property s/he receives.