What We Think

June 29, 2020

Reduced rates of tax and duty on transfers of immovable property

Following the announcement of the reduced rates of income tax and stamp duty on transfers of immovable property earlier this month, the two legal notices confirming these new rates have been published.

Legal Notice 240 of 2020 provides for the reduced rate of duty for any inter vivos transfer of immovable property, or any real right over such property, made on or after the 9th June 2020 but before the 1st April 2021. The duty chargeable on the first €400,000 shall be chargeable at the rate of €1.50, as opposed to €5, for every €100 or part thereof, provided that:

  • The person acquiring the property does not require a permit for the purposes of the Immovable Property (Acquisition by Non-Residents) Act;
  • Notice of the final deed is given to the Commissioner for Revenue by not later than the 30th April 2021; and
  • No relief is claimed under article 32C of the Duty on documents and Transfers Act, which relates to transfers by a gratuitous title to related persons.

This legal notice also provides for a change in relation to the exemption from duty on the first €150,000 for first-time buyers. This new proviso states that if a person acquired an undivided share of an immovable property representing less than 25% of the real value of the whole of such property, this will not be taken into account when determining whether the person is a first time buyer on an acquisition of another property made on or after the 9th June 2020.

Legal Notice 241 of 2020 confirms the reduced rate of tax charged on certain transfers of immovable property. These rules apply to any transfer of property that satisfies the following conditions:

  • The transfer is made on or after the 9th June 2020 but before the 1st April 2021;
  • Were it not for these new rules, the transfer would have been subject to tax at the rate of 8% or 5% of the transfer value;
  • The notice of transfer is given to the Commissioner for Revenue by not later than the 30th April 2021.

In case of a transfer which satisfies the above conditions, the income tax payable on the first €400,000 will be calculated at the rate of 5% and the tax on the remainder shall be calculated at the rate of 8% or 10% according to the provisions of article 5A of the Income Tax Act.

For further information get in touch with Nicky Gouder

This article was also published on The Sunday Times

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