Dáil Éireann Debate, Tuesday - 23 October 2012
182. Deputy Kevin Humphreys asked the Minister for Finance when he intends to commence Section 31A of the Stamp Duties Consolidation Act 1999, inserted by Finance (No. 2) Act 2008 section 82 which was intended as an anti-avoidance measure; the reasons it has not been commenced; the estimated foregone revenue on an annual basis from 2008 to present as a result of it not being commenced; and if he will make a statement on the matter. [46327/12]
View answerI am advised by the Revenue Commissioners that Section 31A of the Stamp Duties Consolidation Act 1999 makes provision, subject to the section being commenced, for a charge to Stamp Duty where land is purchased and a conveyance or transfer of the land is not executed at the time the sale is closed. Under the provision, a Stamp Duty charge would attach to the contract or agreement for sale where the vendor receives a payment amounting to 25% or more of the purchase price concerned. Section 31A of the Stamp Duties Consolidation Act 1999 was subject to a commencement order on the basis that it would be prudent to consider the state of the housing and property market before the provision is put into place.
The previous Government commissioned an independent study of the potential effects that such a provision may have on the market. Of particular importance is that the report indicates that it would have led to a rise in land prices, with a knock-on increase in house prices, especially for first-time buyers, and possibly risked exacerbating the down-turn in the property market. The independent study examined Section 31A of the Stamp Duties Consolidation Act 1999 as inserted by section 110 Finance Act 2007. This was repealed by section 82 Finance (No. 2) Act 2008, which inserted a similar provision to the original section 31A provision.
The commencement of Section 31A of the Stamp Duties Consolidation Act 1999 is kept under constant review and has to take into account circumstances in the housing and property markets. There is currently no requirement to make Stamp Duty returns to the Revenue Commissioners in respect of these transactions as they are not liable to Stamp Duty. There is therefore no specific data on which to accurately estimate any revenue forgone as a result of the provision not being commenced. However, having regard to the fall in Stamp Duty rates, the reduction in property values and inactivity in the property market it is estimated that any revenue foregone is minimal.
