Finance Act 2017 increased the rate of Stamp Duty on all non-residential properties from 2% to 6% and includes non-residential lease premiums. This 6% rate applies to documents executed on/after 11th October 2017.
Although transitional measures have been introduced, this higher Stamp Duty rate will apply for conveyances executed from 1st January 2018.
To be able to avail of the previous 2% rate on commercial property (i.e. where contracts were entered into before 11th October 2017), the two following conditions must be met:
The increased Stamp Duty rate also applies to certain shares which derive their value or the greater part of their value, directly or indirectly, from Irish non-residential land and buildings. The 6% Stamp Duty Charge was introduced by Section 31C SDCA 1999 on conveyances/transfers of shares in Irish and non-Irish companies. The provision also applies to units in an Irish real estate fund, interests in foreign collective investments schemes as well as to interests in a partnership.
This 6% Stamp Duty rate will apply if the result of the transfer is a change in the person/persons having direct/indirect control over the non-residential property and where it would be reasonable to consider that the immovable property concerned was:
Although the legislation applies to any instrument executed on or after 6th December 2017, there are transitional provisions, which will limit the Stamp Duty rate to its existing rate (i.e. 1% or qualifying for an exemption) where:
The new rate will apply to contracts for sale of such shares as well as actual transfers of shares.
As the 6% rate applies to all non-residential property, this means the disposal of goodwill or the transfer of Debtors, as part of the sale of a business, could also give rise to a 6% Stamp Duty charge.
The rates of stamp duty on residential property remain at a rate of 1% up to the first €1,000,000 with 2% payable on the excess over €1,000,000.
The Stamp Duty rate on leases of commercial property will continue to be charged at a rate of 1% on the average annual rent. However, where the landlord receives a premium from the tenant at the commencement of the lease, this will be subject to Stamp Duty at 6%.
Finance Act 2017 (Section 83D SDCA 1999) introduced a Stamp Duty Rebate Scheme in relation to land purchased for the purpose of developing residential property. The Act provides that where Stamp Duty at the new higher rate of 6% is paid on the acquisition of land which is subsequently used to develop residential property, then the purchaser will be entitled to a rebate of 2/3 of the 6% upfront duty paid i.e. a potential refund of up to 4% can be claimed provided the following conditions are satisfied:
Construction operations” is defined as the construction of buildings or structures including the preparatory operations of site clearance, drainage, earth-moving, excavation, laying of foundations and provision of roadways and other access works.
Please be aware that the information contained in this article is of a general nature. It is not intended to address specific circumstances in relation to any individual or entity. All reasonable efforts have been made by Accounts Advice Centre to provide accurate and up-to-date information, however, there can be no guarantee that such information is accurate on the date it is received or that it will continue to remain so. This information should not be acted upon without full and comprehensive, specialist professional tax advice.
Introduction
Finance Act 2012 introduced a number of important changes to the stamp duty filing regime.
The changes apply to all instruments or deeds executed on or after 7th July 2012.
Key Changes in Stamp Duty Filing Regime
Where the execution date of an instrument or deed is on or after 7th July 2012:
What these changes mean
Please be aware that the information contained in this article is of a general nature. It is not intended to address specific circumstances in relation to any individual or entity. All reasonable efforts have been made by Accounts Advice Centre to provide accurate and up-to-date information, however, there can be no guarantee that such information is accurate on the date it is received or that it will continue to remain so. This information should not be acted upon without full and comprehensive, specialist professional tax advice.