Legal notices 240 and 241 introduce the reduced stamp duty and property transfer tax on immovable property transfers announced during the Covid-19 Regeneration Budget.
All transfers of immovable property occurring between 9th June 2020 and 1st April 2021, and registered by 30th April 2021, which would have been subject to a property transfer tax of 8% or 10% of the transfer value, will be subject to a reduced property transfer tax of 5% for the first €400,000 of transfer value. Similarly, inter vivos transfer made during the same period and also registered by the 30th April 2021, will be subject to a reduced stamp duty rate of €1.50 per €100 of value, for the first €400,000 of value. Any transfer over and above a value of €400,000 will be subject to the normal property transfer tax of 8% or 10% (as applicable) and 5% stamp duty. In the case of an acquisition of an undivided share of property, the benefit shall apply on a pro rata basis according to the share of the property being acquired.
In the case of stamp duty, the reduced duty rate is applicable as long as the person acquiring the property does not require a permit for the purposes of the Immovable Property (Acquisition by Non-Residents) and as long as no relief is claimed under Article 32C of the Duty on Documents and Transfers Act on the same transfer with respect to transfers by a gratuitous title.
The reduced stamp duty and property transfer tax are both subject to an anti-abuse provision as per below:
If the Commissioner is of the opinion that two or more transfers form part of a structured arrangement, he may order, within 5 years from the date of the last of the said transfers, that the reduced duty and/or tax granted shall not apply to any of those transfers and in such a case the tax shall be chargeable on each of those transfers in accordance with the provisions of article 5A ITA and Art 32 DDTA without reference to the new rules. Such additional property transfer tax shall become payable by not later than the last day of the month following that in which a notice of the said order is served on the transferor and the additional stamp duty within 30 days following the service of a notice on the transferee. A “structured arrangement” means a series of two or more transfers of portions of the same property made between the same parties (acquisitions made by bodies of persons that are directly or indirectly controlled and beneficially owned as to more than fifty per cent (50%) by the same persons shall be deemed to be acquisitions made by the same person) within a period of six (6) months which are executed by two or more deeds, rather than by one single deed, solely or mainly for the purpose of inflating the benefit of the exemption that would otherwise be available in terms of the rules. “Portions of the same property” includes:
(i) adjacent parcels of land;
(ii) portions of developed property or of property under construction that are not identifiable as separate units;
(iii) the airspace and the property beneath it;
(iv) portions of the airspace overlying the same property;
Prior to LN 240 of 2020, the duty exemption on the first €175,000 applicable to first time buyers was available as long as the transferee did not own any other property. LN 240 relaxes this condition and provides that in respect of transfers of property made on or after the 9th June 2020, for the purpose of determining whether the property is the first immovable property acquired inter vivos by such person, the previous acquisition by such person of an undivided share of immovable property representing less than 25% of the real value of the whole of such property, shall not be taken into account.