I move:
(1)THAT in this Resolution–
"Principal Act" means the Stamp Duties Consolidation Act, 1999;
"Commissioners" means the Revenue Commissioners;
"Schedule 1" means Schedule 1 to the Principal Act;
(2)THAT, subject to paragraph (3) of this Resolution, this Resolution shall have effect as respects instruments executed on or after 15 June 2000.
(3)Paragraph (2) of this Resolution shall not apply as respects any instrument executed on or before 31 January 2001, where–
(a)the effect of the application of paragraph (2) would be to increase the duty otherwise chargeable on the instrument, and
(b)the instrument contains a statement in such form as the Commissioners may specify, certifying that the instrument was executed solely in pursuance of a contract which was evidenced in writing prior to 15 June 2000.
(4)THAT Schedule 1 is amended–
(a)by the substitution of the paragraphs set out in Part 1 of the Schedule to this Resolution for paragraphs (1) to (6) of the Heading ‘CONVEYANCE or TRANSFER on sale of any property other than stocks or marketable securities or a policy of insurance or a policy of life insurance', and
(b)by the substitution of the subparagraph set out in Part 2 of the Schedule to this Resolution for subparagraph (a) of paragraph (3) of the Heading ‘Lease'.
(5)Chapter 2 of Part 7 of the Principal Act is amended by the insertion of the following sections after section 92:
"92A.–(1)The amount of stamp duty chargeable under or by reference to paragraphs (1) to (5) of the Heading ‘CONVEYANCE or TRANSFER on sale of any property other than stocks or marketable securities or a policy of insurance or a policy of life insurance' or clauses (i) to (v) of paragraph (3)(f2>a) of the Heading ‘Lease', as the case may be, in Schedule 1 on any instrument to which this section applies shall be reduced where–
(a)paragraph (1) or clause (i) applies, to an amount equal to three-ninths,
(b)paragraph (2) or clause (ii) applies, to an amount equal to four-ninths,
(c)paragraph (3) or clause (iii) applies, to an amount equal to five-ninths,
(d)paragraph (4) or clause (iv) applies, to an amount equal to six-ninths,
(e)paragraph (5) or clause (v) applies, to an amount equal to seven and one half-ninths,
of the amount which would otherwise have been chargeable but where the amount so obtained is a fraction of £1 that amount shall be rounded up to the nearest £.
(2)Notwithstanding subsection (1)–
(a)where the amount or value of the consideration for the sale which is attributable to residential property, or would be so attributable if the contents of residential property were considered to be residential property, does not exceed £100,000 and the instrument contains a statement certifying that the consideration for the sale is, as the case may be–
(i)wholly attributable to residential property, or
(ii)partly attributable to residential property,
and that the transaction effected by that instrument does not form part of a larger transaction or of a series of transactions in respect of which the amount or value, or the aggregate amount or value, of the consideration which is attributable to residential property, or which would be so attributable if the contents of residential property were considered to be residential property, exceeds £100,000, or
(b)where the amount or value of the consideration, or any part of the consideration (other than rent) for the lease which is attributable to residential property, or would be so attributable if the contents of residential property were considered to be residential property, does not exceed £100,000 and the instrument contains a statement certifying that the consideration, or any part of the consideration (other than rent) is, as the case may be–
(i)wholly attributable to residential property, or
(ii)partly attributable to residential property,
and that the transaction effected by that instrument does not form part of a larger transaction or of a series of transactions in respect of which the amount or value, or the aggregate amount or value, of the consideration or any part of the consideration (other than rent) which is attributable to residential property, or which would be so attributable if the contents of residential property were considered to be residential property, exceeds £100,000,
then the amount of stamp duty chargeable under or by reference to paragraph (1) of the Heading ‘CONVEYANCE or TRANSFER on sale of any property other than stocks or marketable securities or a policy of insurance or a policy of life insurance' or paragraph (3)(a)(i) of the Heading ‘LEASE', as the case may be, in Schedule 1 on any instrument to which this section applies shall be reduced by an amount equal to 100 per cent of the amount which would otherwise have been chargeable.
(3)This section shall apply to–
(a)any instrument to which section 92 applies, or
(b)any instrument, other than one to which section 92 applies, which contains a statement, in such form as the Commissioners may specify, certifying that–
(i)the instrument gives effect to the purchase of a dwellinghouse or apartment, and
(ii)until the expiration of the period of 5 years commencing on the date of the execution of the instrument or the subsequent sale (other than a sale the contract for which, if it were a written conveyance, would not, apart from section 82, be charged with full ad valorem duty or a sale to a company under the control of the vendor or of any person entitled to a beneficial interest in the dwellinghouse or apartment immediately prior to the sale or to a company which would, in relation to a notional gift of shares in that company taken, immediately prior to the sale, by any person so entitled, be under the control of the donee or successor within the meaning of section 16 of the Capital Acquisitions Tax Act, 1976, irrespective of the shares the subject matter of the notional gift) of the dwellinghouse or apartment concerned, whichever event first occurs, that dwellinghouse or apartment will be occupied as the only or principal place of residence of the purchaser, or if there be more than one purchaser, of any one or more of the purchasers or of some other person in right of the purchaser or, if there be more than one purchaser, of some other person in right of any one or more of the purchasers and that no person, other than by virtue of a title prior to that of the purchaser, will derive any rent or payment in the nature of rent for the use of that dwellinghouse or apartment, or of any part of it, during that period.
(4)Where subsection (1) or (2) applies to an instrument and at any time during the period referred to in section 92(1)(b)(ii) or in subsection (3)(b)(ii) of this section, some person, other than by virtue of a title prior to that of the purchaser, derives any rent or payment in the nature of rent for the use of the dwellinghouse or apartment concerned, or of any part of it, the purchaser, or where there be more than one purchaser, each such purchaser, shall–
(a)jointly and severally become liable to pay to the Commissioners a penalty equal to the difference between the amount of the duty which would have been charged in the first instance if the dwellinghouse or apartment had been conveyed or transferred or leased by an instrument to which neither subsection (1) nor (2) applied and the amount of duty which was actually charged together with interest on that amount charged at a rate of 1 per cent per month or part of a month from the date when the rent or payment is first received to the date the penalty is remitted, and
(b)the person who receives the rent or payment shall, within 6 months after the date of the payment, notify the payment to the Commissioners on a form provided, or approved of, by them for the purposes of this section, unless that person is already aware that the Commissioners have already received such a notification from another source.
(5)Where the instrument is one to which this section and section 92 applies–
(a)the reference in subsection (4) to the amount of duty which would have been charged in the first instance shall be construed as a reference to the duty which would have been charged had the relief under section 92 continued to apply, and
(b)the reference to the amount of duty which was actually charged in subsection (2)(a) of section 92 shall be construed as a reference to the duty which would have been charged had the relief under this section been denied,
and the penalty referred to in subsection (4) shall be in addition to any penalty payable under section 92.
(6)Notwithstanding subsection (3), subsections (1) and (2) shall not apply unless the consideration for the sale or lease concerned which is attributable to residential property is wholly attributable to residential property which would otherwise qualify for relief under this section or where the sale or lease concerned forms part of a larger transaction or of a series of transactions unless the aggregate consideration for that larger transaction or series of transactions which is attributable to residential property is wholly attributable to residential property which would otherwise qualify for relief under this section.
(7)Notwithstanding subsection (3), this section shall not apply to an instrument to which section 92B applies.
92B.–(1)In this section–
‘first time purchaser' means a person who, at the time of the execution of the instrument to which this section applies, has not, either individually or jointly with any other person or persons, previously purchased (other than the purchase of a leasehold interest by way of grant or assignment for any term not exceeding one year), or built on his or her own behalf, another dwellinghouse or apartment or a part of another dwellinghouse or apartment.
(2)The amount of stamp duty chargeable under or by reference to paragraphs (1) to (5) of the Heading ‘CONVEYANCE or TRANSFER on sale of any property other than stocks or marketable securities or a policy of insurance or a policy of life insurance' or clauses (i) to (v) of paragraph (3)(a) of the Heading ‘Lease', as the case may be, in Schedule 1 on any instrument to which this section applies shall be reduced where–
(a)paragraph (1) or (2) or clause (i) or (ii) applies, to an amount equal to three-ninths,
(b)paragraph (3) or clause (iii) applies, to an amount equal to three and three quarter-ninths,
(c)paragraph (4) or clause (iv) applies, to an amount equal to four and one half-ninths,
(d)paragraph (5) or clause (v) applies, to an amount equal to seven and one half-ninths,
of the amount which would otherwise have been chargeable but where the amount so obtained is a fraction of £1 that amount shall be rounded up to the nearest £.
(3)Notwithstanding subsection (2)–
(a)where the amount or value of the consideration for the sale which is attributable to residential property, or would be so attributable if the contents of residential property were considered to be residential property, does not exceed £150,000 and the instrument contains a statement certifying that the consideration for the sale is, as the case may be–
(i)wholly attributable to residential property, or
(ii)partly attributable to residential property,
and that the transaction effected by that instrument does not form part of a larger transaction or of a series of transactions in respect of which the amount or value, or the aggregate amount or value, of the consideration which is attributable to residential property, or which would be so attributable if the contents of residential property were considered to be residential property, exceeds £150,000, or
(b)where the amount or value of the consideration, or any part of the consideration (other than rent) for the lease which is attributable to residential property, or would be so attributable if the contents of residential property were considered to be residential property, does not exceed £150,000 and the instrument contains a statement certifying that the consideration, or any part of the consideration (other than rent) is, as the case may be–
(i)wholly attributable to residential property, or
(ii)partly attributable to residential property,
and that the transaction effected by that instrument does not form part of a larger transaction or of a series of transactions in respect of which the amount or value, or the aggregate amount or value, of the consideration or any part of the consideration (other than rent) which is attributable to residential property, or which would be so attributable if the contents of residential property were considered to be residential property, exceeds £150,000,
then the amount of stamp duty chargeable under or by reference to paragraph (1) of the Heading ‘CONVEYANCE or TRANSFER on sale of any property other than stocks or marketable securities or a policy of insurance or a policy of life insurance' or paragraph (3)(a)(i) of the ‘LEASE', as the case may be, in Schedule 1 on any instrument to which this section applies shall be reduced by an amount equal to 100 per cent of the amount which would otherwise have been chargeable.
(4)This section shall apply to–
(a)any instrument to which section 92 applies and which contains a statement, in such form as the Commissioners may specify, certifying that the purchaser, or where there is more than one purchaser, each and every one of the purchasers, is a first time purchaser, or
(b)any instrument, other than one to which section 92 applies, which contains a statement, in such form as the Commissioners may specify, certifying that the purchaser, or where there is more than one purchaser, each and every one of the purchasers, is a first time purchaser, and that–
(i)the instrument gives effect to the purchase of a dwellinghouse or apartment, and
(ii)until the expiration of the period of 5 years commencing on the date of the execution of the instrument or the subsequent sale (other than a sale the contract for which, if it were a written conveyance, would not, apart from section 82, be charged with full ad valorem duty or a sale to a company under the control of the vendor or of any person entitled to a beneficial interest in the dwellinghouse or apartment immediately prior to the sale or to a company which would, in relation to a notional gift of shares in that company taken, immediately prior to the sale, by any person so entitled, be under the control of the donee or successor within the meaning of section 16 of the Capital Acquisitions Tax Act, 1976, irrespective of the shares the subject matter of the notional gift) of the dwellinghouse or apartment concerned, whichever event first occurs, that dwellinghouse or apartment will be occupied as the only or principal place of residence of the purchaser, or if there be more than one purchaser, of any one or more of the purchasers or of some other person in right of the purchaser or, if there be more than one purchaser, of some other person in right of any one or more of the purchasers and that no person, other than by virtue of a title prior to that of the purchaser, will derive any rent or payment in the nature of rent for the use of that dwellinghouse or apartment, or of any part of it, during that period.
(5)Where subsection (2) or (3) applies to an instrument and at any time during the period referred to in section 92(1)(b)(ii) or in subsection (4)(b)(ii) of this section, some person, other than by virtue of a title prior to that of the purchaser, derives any rent or payment in the nature of rent for the use of the dwellinghouse or apartment concerned, or of any part of it, the purchaser, or where there be more than one purchaser, each such purchaser, shall–
(a)jointly and severally become liable to pay to the Commissioners a penalty equal to the difference between the amount of the duty which would have been charged in the first instance if the dwellinghouse or apartment had been conveyed or transferred or leased by an instrument to which neither subsection (2) nor (3) applied and the amount of duty which was actually charged together with interest on that amount charged at a rate of 1 per cent per month or part of a month from the date when the rent or payment is first received to the date the penalty is remitted, and
(b)the person who receives the rent or payment shall, within 6 months after the date of the payment, notify the payment to the Commissioners on a form provided, or approved of, by them for the purposes of this section, unless that person is already aware that the Commissioners have already received such a notification from another source.
(6)Where the instrument is one to which this section and section 92 applies–
(a)the reference in subsection (5) to the amount of duty which would have been charged in the first instance shall be construed as a reference to the duty which would have been charged had the relief under section 92 continued to apply, and
(b)the reference to the amount of duty which was actually charged in subsection (2)(a) of section 92 shall be construed as a reference to the duty which would have been charged had the relief under this section been denied,
and the penalty referred to in subsection (5) shall be in addition to any penalty payable under section 92.
(7)Notwithstanding subsection (4), subsections (2) and (3) shall not apply to an instrument which gives effect to a sale or lease of more than one unit of residential property or where the sale or lease concerned forms part of a larger transaction or of a series of transactions comprising more than one unit of residential property.".
(6)IT is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1927 (No. 7 of 1927).
SCHEDULE
STAMP DUTY ON INSTRUMENTS
Part 1
Conveyance or Transfer on Sale of any property other than stocks or marketable securities or a policy of insurance or a policy of life insurance
“(1)Where the amount or value of the consideration for the sale which is attributable to residential property, or would be so attributable if the contents of residential property were considered to be residential property, does not exceed £150,000 and the instrument contains a statement certifying that the consideration for the sale is, as the case may be– |
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(a)wholly attributable to residential property, or |
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(b)partly attributable to residential property, |
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and that the transaction effected by that instrument does not form part of a larger transaction or of a series of transactions in respect of which the amount or value, or the aggregate amount or value, of the consideration which is attributable to residential property, or which would be so attributable if the contents of residential property were considered to be residential property, exceeds £150,000 |
9 per cent of the consideration which is attributable to residential property but where the calculation results in an amount which is not a multiple of £1 the amount so calculated shall be rounded up to the nearest £. |
(2)Where paragraph (1) does not apply and the amount or value of the consideration for the sale which is attributable to residential property, or would be so attributable if the contents of residential property were considered to be residential property, does not exceed £200,000 and the instrument contains a statement certifying that the consideration for the sale is, as the case may be– |
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(a)wholly attributable to residential property, or |
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(b)partly attributable to residential property, |
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and that the transaction effected by that instrument does not form part of a larger transaction or of a series of transactions in respect of which the amount or value, or the aggregate amount or value, of the consideration which is attributable to residential property, or which would be so attributable if the contents of residential property were considered to be residential property, exceeds £200,000 |
9 per cent of the consideration which is attributable to residential property but where the calculation results in an amount which is not a multiple of £1 the amount so calculated shall be rounded up to the nearest £. |
(3)Where paragraphs (1) and (2) do not apply and the amount or value of the consideration for the sale which is attributable to residential property, or would be so attributable if the contents of residential property were considered to be residential property, does not exceed £250,000 and the instrument contains a statement certifying that the consideration for the sale is, as the case may be– |
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(a)wholly attributable to residential property, or |
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(b)partly attributable to residential property, |
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and that the transaction effected by that instrument does not form part of a larger transaction or of a series of transactions in respect of which the amount or value, or the aggregate amount or value, of the consideration which is attributable to residential property, or which would be so attributable if the contents of residential property were considered to be residential property, exceeds £250,000 |
9 per cent of the consideration which is attributable to residential property but where the calculation results in an amount which is not a multiple of £1 the amount so calculated shall be rounded up to the nearest £. |
(4) Where paragraphs (1) to (3) do not apply and the amount or value of the consideration for the sale which is attributable to residential property, or would be so attributable if the contents of residential property were considered to be residential property, does not exceed £300,000 and the instrument contains a statement certifying that the consideration for the sale is, as the case may be– |
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(a)wholly attributable to residential property, or |
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(b)partly attributable to residential property, |
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and that the transaction effected by that instrument does not form part of a larger transaction or of a series of transactions in respect of which the amount or value, or the aggregate amount or value, of the consideration which is attributable to residential property, or which would be so attributable if the contents of residential property were considered to be residential property, exceeds £300,000 |
9 per cent of the consideration which is attributable to residential property but where the calculation results in an amount which is not a multiple of £1 the amount so calculated shall be rounded up to the nearest £. |
(5)Where paragraphs (1) to (4) do not apply and the amount or value of the consideration for the sale which is attributable to residential property, or would be so attributable if the contents of residential property were considered to be residential property, does not exceed £500,000 and the instrument contains a statement certifying that the consideration for the sale is, as the case may be– |
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(a)wholly attributable to residential property, or |
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(b)partly attributable to residential property, |
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and that the transaction effected by that instrument does not form part of a larger transaction or of a series of transactions in respect of which the amount or value, or the aggregate amount or value, of the consideration which is attributable to residential property, or which would be so attributable if the contents of residential property were considered to be residential property, exceeds £500,000 |
9 per cent of the consideration which is attributable to residential property but where the calculation results in an amount which is not a multiple of £1 the amount so calculated shall be rounded up to the nearest £. |
(6)Where paragraphs (1) to (5) do not apply and the amount or value of the consideration for the sale is wholly or partly attributable to residential property |
9 per cent of the consideration which is attributable to residential property but where the calculation results in an amount which is not a multiple of £1 the amount so calculated shall be rounded up to the nearest £.”. |
Part 2
Lease
“(a)where the consideration, or any part of the consideration (other than rent), moving either to the lessor or to any other person, consists of any money, stock or security, and– |
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(i)the amount or value of such consideration which is attributable to residential property, or would be so attributable if the contents of residential property were considered to be residential property, does not exceed £150,000 and the lease contains a statement certifying that the consideration (other than rent) for the lease is, as the case may be– |
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(I)wholly attributable to residential property, or |
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(II)partly attributable to residential property, |
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and that the transaction effected by that instrument does not form part of a larger transaction or of a series of transactions in respect of which the amount or value, or the aggregate amount or value, of the consideration (other than rent) which is attributable to residential property, or which would be so attributable if the contents of residential property were considered to be residential property, exceeds £150,000 |
9 per cent of the consideration which is attributable to residential property but where the calculation results in an amount which is not a multiple of £1 the amount so calculated shall be rounded up to the nearest £. |
(ii)the amount or value of such consideration which is attributable to residential property, or would be so attributable if the contents of residential property were considered to be residential property, does not exceed £200,000 and the lease contains a statement certifying that the consideration (other than rent) for the lease is, as the case may be– |
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(I)wholly attributable to residential property, or |
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(II)partly attributable to residential property, |
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and that the transaction effected by that instrument does not form part of a larger transaction or of a series of transactions in respect of which the amount or value, or the aggregate amount or value, of the consideration (other than rent) which is attributable to residential property, or which would be so attributable if the contents of residential property were considered to be residential property, exceeds £200,000 and clause (i) does not apply |
9 per cent of the consideration which is attributable to residential property but where the calculation results in an amount which is not a multiple of £1 the amount so calculated shall be rounded up to the nearest £. |
(iii)the amount or value of such consideration which is attributable to residential property, or would be so attributable if the contents of residential property were considered to be residential property, does not exceed £250,000 and the lease contains a statement certifying that the consideration (other than rent) for the lease is, as the case may be– |
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(I)wholly attributable to residential property, or |
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(II)partly attributable to residential property, |
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and that the transaction effected by that instrument does not form part of a larger transaction or of a series of transactions in respect of which the amount or value, or the aggregate amount or value, of the consideration (other than rent) which is attributable to residential property, or which would be so attributable if the contents of residential property were considered to be residential property, exceeds £250,000 and clauses (i) and (ii) do not apply |
9 per cent of the consideration which is attributable to residential property but where the calculation results in an amount which is not a multiple of £1 the amount so calculated shall be rounded up to the nearest £. |
(iv)the amount or value of such consideration which is attributable to residential property, or would be so attributable if the contents of residential property were considered to be residential property, does not exceed £300,000 and the lease contains a statement certifying that the consideration (other than rent) for the lease is, as the case may be– |
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(I)wholly attributable to residential property, or |
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(II)partly attributable to residential property, |
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and that the transaction effected by that instrument does not form part of a larger transaction or of a series of transactions in respect of which the amount or value, or the aggregate amount or value, of the consideration (other than rent) which is attributable to residential property, or which would be so attributable if the contents of residential property were considered to be residential property, exceeds £300,000 and clauses (i) to (iii) do not apply |
9 per cent of the consideration which is attributable to residential property but where the calculation results in an amount which is not a multiple of £1 the amount so calculated shall be rounded up to the nearest £. |
(v)the amount or value of such consideration which is attributable to residential property, or would be so attributable if the contents of residential property were considered to be residential property, does not exceed £500,000 and the lease contains a statement certifying that the consideration (other than rent) for the lease is, as the case may be– |
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(I)wholly attributable to residential property, or |
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(II)partly attributable to residential property, |
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and that the transaction effected by that instrument does not form part of a larger transaction or of a series of transactions in respect of which the amount or value, or the aggregate amount or value, of the consideration (other than rent) which is attributable to residential property, or which would be so attributable if the contents of residential property were considered to be residential property, exceeds £500,000 and clauses (i) to (iv) do not apply |
9 per cent of the consideration which is attributable to residential property but where the calculation results in an amount which is not a multiple of £1 the amount so calculated shall be rounded up to the nearest £. |
(vi)the amount or value of such consideration is wholly or partly attributable to residential property and clauses (i) to (v) do not apply |
9 per cent of the consideration which is attributable to residential property but where the calculation results in an amount which is not a multiple of £1 the amount so calculated shall be rounded up to the nearest £.”. |
Deputies on all sides of the House are well aware of the increases in house prices which are making things difficult for people who wish to enter the housing market at present. In particular, the problems are most acutely felt by those who are trying to purchase their first home. The Government has already taken a series of actions which were designed to increase housing supply, dampen investor demand and thereby moderate house price increases. While these measures are having positive effects, the Government is now proposing a range of further initiatives to deal with continued rising demand for houses for owner-occupiers in particular.
The Government has considered the results of a further study commissioned by my colleague, the Minister of State at the Department of the Environment and Local Government with responsibility for housing and urban renewal, Deputy Molloy, and undertaken by Peter Bacon and Associates, Economic Consultants. This study reviews and evaluates the effects of measures taken by the Government, in particular, under "Action in the Housing Market" in April 1998 and "Action on House Prices" in March 1999. It also reviews other recent developments regarding housing demand, housing supply and house prices as well as providing a general review of the market since the publication of previous studies by the same consultancy firm. The consultants have concluded that considerable progress has been made in increasing housing output and in moderating the rate of price increase in new and existing houses, and that this has been achieved against a background in which housing demand has grown even more rapidly than was anticipated.
It is clear from their analysis that the supply-demand imbalance in the housing market and the resultant increase in prices is fuelling demand further and leading to market instability as demand is brought forward to avoid anticipated future price increases and as investors seek to take advantage of capital appreciation. Recent moderation in overall house price trends masks a number of developments, in particular the fact that prices at the lower end of the housing market are now rising more rapidly than those at the upper end of the market.
The consultants' recommendations to bring stability to the housing market focus on measures to expedite the supply response to meet rising demand and on certain targeted demand reduction measures to curb speculative and brought forward demand in the short-term. The Government is now proposing a comprehensive package of measures to maximise housing output to meet the continuing strong demand for housing, to curb short-term speculative demand, to strengthen the position of first time purchasers in the market, to increase the supply of social and affordable housing to meet rising housing needs and to improve the institutional arrangements to facilitate the delivery of housing related infrastructure and thereby increase overall housing supply.
The consultants concluded that house price increases since the revision of stamp duty rates in 1998 have resulted in an increase in the burden of stamp duty, making it again a potential barrier to first time buyers entering the existing house market. This is significant because first time buyer housing needs are now being met increasingly from the existing house market. The analysis of the housing market carried out by the consultants suggested that there is a significant element of speculative or transitory demand which hampers efforts to meet fundamental demand with increased supply. The consultants therefore considered it appropriate that measures should be introduced to dampen this element of demand.
They considered changes in stamp duties are one appropriate means to achieve this. The Government endorses these conclusions and has now decided to revise the existing stamp duty structure for second hand residential properties bought by owner-occupiers and for all residential properties bought by investors in order to bene fitowner-occupiers and, in particular, those owner-occupiers who are first time buyers.
The consultants also recommended the introduction of an annual tax of 2% to 3% of the value of properties which are not principal private residences as another measure to deal with demand. In view of evidence of increased speculative demand, the Government has decided to introduce an annual tax of 2% which will apply for three years to certain residential properties other than principal private residences.
Exemptions will be provided in respect of qualifying residential investments under section 23, the town, rural and urban renewal schemes, section 50, which is student accommodation, the proposed living over the shop scheme and rented residential properties under the seaside resorts and the park and ride scheme. Exemptions will also be provided in respect of heritage homes and registered holiday homes. The tax will not apply to inheritance or to gifts of residential property where the property was acquired by the donor before 15 June 2000.
Exemptions will also be available for landlords who comply with the standards and requirements of a proposed new regime for the private rented sector to be determined, following consideration of the forthcoming report of the Commission on the Private Rented Residential Sector. In the meantime, exemptions will be provided for landlords who comply with the registration, rentbooks and standards regulations provided for under the Housing (Miscellaneous Provisions) Act, 1992.
The stamp duty measure is the subject of the financial resolution now being moved. I will be publishing a Finance Bill next week which I hope will be debated here in Dáil Éireann the week after next. The Bill will encompass the changes to the stamp duty regime as well as the anti-speculative annual 2% tax which will apply for three years to certain residential properties other than a principal private residence.
It is important to give assurance to those who are in the process of buying a home that the stamp duty changes are brought in with immediate effect from the time the Government announces its initiatives. On stamp duty, we propose to introduce a three tiered structure which will apply to first time buyers, owner-occupiers other than first time buyers and investors. The exemption threshold for first time buyers is being raised from £60,000 to £150,000 and for other owner-occupiers to £100,000. Rates for first time buyers at values up to £300,000 will now be 25% less than for other owner-occupiers. It is proposed to charge a flat 9% for all categories of investors buying new or second hand residential property.
The rates proposed for owner-occupiers and first time buyers are in line with the recommendations made by the consultants. In the case of investors, the consultants recommended no exemption threshold and rates 25% higher than the standard owner-occupier rate. The Government was very conscious of the continued price increases at the lower end of the market and the importance of ensuring that families on modest resources are not put in a position of being priced out of the market by competition from investors. It is considered that a graduated scale of tax for investors might not sufficiently discourage speculative investment in the lower end of the market to the detriment of owner-occupiers and first time purchasers. Having considered the issues involved, the Government has decided that a rate of 9% should apply to all purchases by investors of new and second hand residential property irrespective of value.
The proposed rates of stamp duty for housing are residential property purchased by first time buyers up to £150,000 will be exempt; for other owner-occupiers properties up to £100,000 will be exempt; owner-occupiers who are not first time buyers will be liable at 3% for properties in excess of £100,000 and up to £150,000; in the case of properties in excess of £150,000 and up to £200,000, first time buyers will be liable at 3% and other owner-occupiers at 4%; in the case of residential properties in excess of £200,000 and up to £250,000, first time buyers will be liable at 3.75% and other owner-occupiers at 5%; in the case of residential properties in excess of £250,000 and up to £300,000, first time buyers will be liable at 4.5% and other owner-occupiers at 6%; in the case of residential properties valued in excess of £300,000 and up to £500,000, first time buyers and other owner-occupiers will all be liable at 7.5% and other residential properties valued in excess of £500,000 are liable at 9%.
Transitional arrangements will apply up to 31 January 2001 similar to those applying when the previous stamp duty changes were made in 1998. This means that pipeline cases will be allowed to avail of existing rates where written contracts were entered into prior to today and provided the conveyance takes place before 31 January 2001.
The total cost of these changes is estimated at £5 million this year and £10 million in a full year with the additional cost of the reductions for first time buyers and owner-occupiers being partially offset by higher rates for investors. I am confident these revised stamp duty rates will help reduce the cost burden faced by low to middle-income home buyers and widen their options. They will provide a particular advantage to first-time buyers who face difficulties in the current market.