Dáil Éireann debate -
Thursday, 21 Feb 2002

Vol. 549 No. 2

Written Answers. - Stamp Duty.

Róisín Shortall

Question:

85 Ms Shortall asked the Minister for Finance if a person purchasing a house with their fiancee from a parent at a discounted amount from the market value of the property is charged stamp duty at the market value rather than the sale value of the house; if so, if he will review this policy; and if he will make a statement on the matter. [6136/02]

Minister for Finance (Mr. McCreevy)

The rate of stamp duty is determined by the Revenue Commissioners in line with stamp duty legislation. Section 30 of the Stamp Duty Consolidation Act, 1999, outlines the legislation in relation to this issue.

In summary this section imposes a charge to stamp duty on a voluntary disposition in any case where there is no consideration for the property being transferred or where the consideration is less than the market value. In these cases stamp duty is chargeable on the market value of the property transferred and not the lower sale price.

It should also be noted that stamp duty is payable at half the specified rate on conveyances of property between certain blood relations. As a result, stamp duty on the transfer of such a house from a parent to his or her son or daughter is payable at half rate. This relief will not apply if a party not satisfying the relationship criteria, for example a spouse or a fiancee, is also a beneficiary from the transfer of the property in question. However the resulting full liability to stamp duty will be avoided if the property transfer takes place in two stages for example father to son and son to wife. This is because no stamp duty is payable on transfer of property between spouses.

It should be noted that I have made a number of changes in recent years to stamp duty legislation. For example, the first-time buyer of a second hand property pays no stamp duty on a second hand property worth less than €190,500, and any other owner-occupier purchasing a second hand property is exempt from stamp duty on properties valued less than €127,000.

These changes were in recognition of the increases in house prices in recent years and the knock-on effect this was having on stamp duty payable in respect of ordinary houses. While the rules, rates and thresholds governing stamp duty are reviewed on an ongoing basis, I have no plans to amend them at this time.

It should also be noted that if a house is sold at a reduced rate, the difference between the market value of the property and the consideration paid for the property will be considered as a gift, and as such may be liable for capital acquisitions tax.