Stamp duty on property

Information

Stamp duty in Ireland is a tax payable to the Government based on the documents used in the transfer of property. (In other words, the conveyance document which transfers ownership to you). The value of the property (home or apartment, land or housing site) and your status (whether you are a first-time buyer, investor, etc.) will determine the 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:

• Whether you are going to live in the house or apartment (residential or owner-occupier) or are an investor
• Whether as an owner-occupier, you are a first time buyer
• Whether it is a new or second-hand house or apartment
• The size of the house or apartment.

Stamp duty is also payable on land/housing sites without residential buildings. Where 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.

First-time buyers

A first-time buyer is defined as a person (or where there is more than one buyer, each person):

• Who has not on any previous occasion, either individually or jointly, purchased or built on his or her own behalf a house in Ireland or abroad
• Where the property purchased is occupied by the purchaser (or a person on his or her behalf) as his or her only or principal place of residence 
• Where no rent (except under the Rent a Room Scheme) is derived from the property for up to 5 years after completion of the purchase - see 'Clawback of stamp duty relief' below.

A divorced or separated person can be considered a first-time buyer, if you meet the following conditions:

• It is the first house purchased by you following the separation or divorce 
• You have left your former marital home
• You do not retain any interest in the marital home
• Immediately prior to the date of the judicial separation, deed of separation, decree of divorce or decree of nullity you were not entitled to an interest in a house other than the marital home 
• At the date of the judicial separation, deed of separation, decree of divorce or decree of nullity, your separated or former spouse must be living in the house which was occupied by you both before your separation or divorce. 

The Revenue Commissioners have published a leaflet on 'First-time buyer relief' with frequently asked questions (FAQs) on first-time buyers and stamp duty.

Non-owner-occupiers and investors

People who rent out new or second-hand houses or apartments are considered investors. The same rates of stamp duty apply to investors as to non-first time owner-occupiers - see 'Rates' below.

Rules

Stamp duty on new houses and apartments

Owner-occupiers of new houses/apartments are exempt from stamp duty, provided that the area of the house or apartment does not exceed 125 sq. metres (1,346 sq. feet) and a Floor Area Compliance Certificate has been issued. The house or apartment must not have been occupied prior to its purchase. It must be occupied as the owner's main place of residence for a period of 5 years from the date of the purchase deed. However if you sell the house during this period you do not have to repay stamp duty.

If the area of the house or flat is greater than 125 sq. metres (1,346 sq. feet), some stamp duty is payable if the Chargeable Consideration is above the relevant exemption threshold. The stamp duty is assessed on either the cost of the site or 25% of the cost of the site plus the building costs (less VAT), whichever is the greater figure. This figure is called the Chargeable Consideration.

Stamp duty rates for first-time buyers

Stamp duty rates for first-time buyers who are owner-occupiers of new or second-hand residential property were changed significantly in June 2007. The change affects any legal instruments (for example, the deed of conveyance or transfer or lease giving effect to the contract) relating to a first-time buyer buying a residential property on or after 31 March 2007.

First-time buyers who are owner-occupiers of new and second-hand residential property do not pay stamp duty.

Clawback of stamp duty relief

A stamp duty clawback arises where rent, other than under the 'Rent a Room scheme' is obtained within the 5 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 the reduced stamp-duty rates.

Reduction of claw-back period: for purchase deeds dated on or after 5 December 2007 the clawback period is reduced to 2 years. Where a property was purchased before 5 December 2007 but was rented on or after that date, there will be no claw back of stamp duty relief if it is rented in the 3rd, 4th or 5th year of ownership.

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 6th April, 2001 for letting of furnished accommodation in part of the house.

Stamp duty rates for non-owner-occupiers

Non-owner-occupiers are liable for stamp duty on both new and second-hand houses or apartments. The same rates of stamp duty apply to investors as to non-first time owner-occupiers. From 5 December 2007 the stamp duty rates for residential property have been revised and simplified - see 'Rates' below.

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 (for example, 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  be greater than €500,000 for disposals made on or after 5 December 2007. The exemption threshold is €253,947.62 for disposals made before 5 December 2007.

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.

The area of the site must be less than 1 acre (0.4047 hectare), exclusive of the area occupied by the house itself.

Stamp duty relief for exchange of farmland for farm consolidation purposes

The Finance Act 2005 (pdf) 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. This once-off relief applies for a two year period and full details, including the qualifying conditions, are set out in Revenue's Stamp Duty Farm Consolidation Relief (pdf) leaflet.

Rates

Changes to rates of stamp duty

There is a new simplified system of stamp duty which apply to residential property purchases on or after 5 December 2007. It also applies to instruments executed in the 30 days prior to that date.  The first €125,000 is exempt from stamp duty. Properties over €125,000 but under €1 million are charged stamp duty of 7% on the excess over €125,000. Properties over €1 million will be charged stamp duty of 9% on the excess over €1 million and 7% on the remainder between €125,000 and €1 million. Properties with a value of more than €125,000 but not exceeding €127,000 will not be liable for stamp duty.

First time buyers

First time buyers are exempt from stamp duty on new and second-hand houses and apartments.

Not a first time buyer

Since 5 December 2007, stamp duty rates on new houses and apartments with a floor area more than 125 square metres and a Floor Area Compliance Certificate:

Since 5 December 2007, stamp duty rates for second-hand houses and apartments for owner-occupiers (and investors buying new or second-hand houses and apartments):

Rates of stamp duty on land/housing sites without residential buildings:

How to apply

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

Where to apply