Stamp duty is a tax on documents and most peoples experience with stamp duty will be in relation to property purchase which gives rise to the notion that stamp duty is applied to property. But it is actually a tax on the instrument which witnesses the property transaction and you will also see stamp duty applied to other instruments (legal documents) such as shares in companies.
The Stamp Duties Consolidation act 1999 governs this whole area and in that legislation there is a Schedule 1 which sets out the heads of charge for stamp duty which stipulates that the stamp duty on a conveyance or transfer of property will range from 0% to 9%. Each year the government in the Finance Act may change the rate of duty in various heads of charge but the duty will be calculated on an “ad valorem” (for value) rate.
Generally stamp duty will be payable if the document/instrument is executed in Ireland or if the transaction relates to property in the State. You used to have 30 days within which to stamp your document/instrument with the Revenue Commissioners; this is now 44 days and you can do the stamping online with the new online stamping service provided by the Revenue Commissioners called eStamping with the purchaser being the liable person for the duty. However if it is a voluntary transfer, such as a gift, both parties will be jointly and severally liable.
Residential Stamp Duty Rates
The rates of duty applicable for residential property (whether new or second-hand) are as follows:
First €125,000 Nil
Next €875,000 7%
Excess over €1,000,000 9%
* Transactions, where the consideration (or the aggregate consideration) does not exceed €127,000, are exempt from stamp duty.
Stamp Duty Rates On Non Residential Property
Up to €10,000 Exempt
€10,001 to €20,000 1%
€20,001 to €30,000 2%
€30,001 to €40,000 3%
€40,001 to €70,000 4%
€70,001 to €80,000 5%
Over €80,000 6%
These rates are applicable from February, 2010.
How much stamp duty you will have to pay will depend on whether you are considered to be a first time buyer, owner occupier or investor. First time buyers do not have to pay stamp duty on either new or second hand houses but there is a clawback of duty if the first time buyer or owner occupier lets all or part of the property other than under the Rent A Room scheme. This rent a room relief is not available to investors.
Stamp Duty On New Homes
Investors pay full duty on new homes; first time buyers are exempt. Owner occupiers may qualify for relief from stamp duty if there is a Floor Area Compliance Certificated for the property and whether the house is completed or if it is the sale of a site and contract to build a new house.
Conveyance Combined With Building Agreement
Owner occupiers will pay duty on either 25% of the total price excluding vat or the price of the site(excluding vat), whichever is the higher.
No stamp duty is payable on contents although they are taken into consideration when apportioning the total price paid.
Stamp Duty on Leases
Stamp duty is payable on leases and is divided between any premium payable which is calculated at normal stamp duty rates and duty payable on the rent. Generally if the lease is for less than 35 years and the rent is less than 30,000 euros there is no duty.
If the lease is greater than 100 years stamp duty is payable at 12% of the average annual rent.
If the lease is greater than 35 years and less than 100 years then duty is payable at 6% of the annual average rent.
If the lease is less than 35 years stamp duty is due at a rate of 1% of the average annual rent.
It is important to note that these rates apply on the creation of a new lease; if you are dealing with an existing lease and are taking an assignment of the lease then it is treated as a normal property transaction and the normal property transfer rates apply.
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