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.(NB: See update 2013 below)
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.
Residential and Non-Residential Property
The stamp duty on the premium or fine is the normal rate for residential or non residential as appropriate.
Lease for a term not exceeding 35 years or for any indefinite term-Rate: 1% of the average annual rent
Lease for a term exceeding 35 years but not exceeding 100 years-Rate: 6% of the average annual rent
Lease for a term exceeding 100 years-Rate 12% of the average annual rent
A much simplified stamp duty system was introduced in Ireland in 2010 with many of the exemptions and reliefs outlined above being abolished.
The stamp duty rates in Ireland are as follows:
Up to €1,000,000-the rate is 1%
Excess over €1,000,000-the rate is 2%
There are also reliefs in relation to transfers between spouses, civil partners, and cohabitants.
Non Residential Property
The rate is 2%.
There are a number of stamp duty reliefs and exemptions and this post will look at the most common ones.
Transfers Between Spouses
Transfers between spouses are exempt from stamp duty.
Stamp Duty Reliefs
This relief applies to transfers between blood relations such as transfers from parent to child, grandchild, grandparent, brother, sister and some others. The relief provides for payment of 50% of the normal stamp duty that would have applied had there been no relationship.
Young Trained Farmer
There is no stamp duty on a transfer of qualifying land to young trained farmers.
Site Transfer From Parent To Child
When a parent transfers a site to a child for the purposes of building a private residence, and the value of the site is less than 500,000 euros, then there is no stamp duty.The size of the site can not be greater than 1 acre.
Farm Consolidation Relief
There is considerable relief in relation to the transfer of farms to encourage the consolidation of farms and the best place to investigate this scheme is the farm advisory body, Teagasc.
Charities And Sporting Bodies
Charities and sporting bodies both enjoy relief from paying stamp duty when acquiring property; both the charities and sporting bodies need to be approved and further enquiries should be made from the Stamp duty section of Revenue Commissioners for further information.
Bear in mind that if the transfer is a voluntary transaction, that is a gift, the stamp duty will be calculated on the market value of the property at the date of transfer.
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