In yesterdays budget Stamp Duty on residential property has been completely reformed and simplified. Stamp duty has been reduced to a flat rate of 1% on property values up to €1 million and 2% on any amounts over €1 million. There will no longer be a distinction between new versus second hand properties or first time and non-first time buyers. While this is good news for potential property buyers the new rates are a bit of a sting for those who paid the full whack of 9% in the height of the boom.
So to sum it all up, no matter what your property buyer status, what property you are buying or what price the property is… 1% Stamp Duty applies on properties up to €1million and 2% on amounts over €2million AND there are no longer any exemptions. All the stamp duty reliefs and exemptions listed below are to be abolished i.e.
- First time buyer relief
- Exemption for new houses under 125 sq m in size
- Relief on new houses over 125 sq m in size
- Consanguinity relief for residential property transfers
- Exemption for residential property transfers valued under €127,000
- Relief if transferring / selling a site or building from parent to child
There are no changes to the commercial property stamp duty position, which is largely at a rate of 6%. Stamp duty on land remains unchanged.
Ah, I’m in the middle of buying a property…Can I pay the new rate?
If you are currently in the middle of a transaction and have not yet paid Stamp Duty at 7% then the new rate of Stamp Duty at 1% should be applicable. The new Stamp Duty rates will apply to property transfers on or after December 8th. However, it was also said yesterday that provisions will be put in place to ensure that anyone who has entered into a binding contract to purchase a house before December 8th, and who completes the transfer of that property before July 1st, 2011 will not lose out. However be sure to check everything over with your Solicitor.