Dáil Éireann Debate, Wednesday - 25 May 2022
26. Deputy Carol Nolan asked the Minister for Finance his plans to address concerns that the current rate of stamp duty applicable to a single residential property is acting as a barrier to the building of a home; and if he will make a statement on the matter. [26703/22]
View answerStamp duty on the sale of residential properties such as apartments and houses is chargeable at the rate of 1% where the consideration does not exceed €1 million. Where the consideration exceeds €1 million, stamp duty is chargeable at 1% on the first €1 million and 2% on the balance. Stamp duty is payable by the purchaser. However, a higher stamp duty rate of 7.5% applies to the sale of non-residential land, which includes land purchased by a person for the purpose of building a single residential property on it. I assume this is the concern the Deputy is referring to.
Notwithstanding the higher rate of stamp duty that applies on the sale of non-residential land, section 83D of the Stamp Duties Consolidation Act 1999 provides for a partial refund of stamp duty paid on the sale of non-residential land where it is subsequently developed for residential purposes. It includes situations where an individual purchases a site and subsequently builds a house on it. Section 83D was introduced in 2017 when the rate of stamp duty chargeable on non-residential land was increased from 2% to 6%. The current rate of 7.5% has applied to any transfers dated on or after 9 October 2019. The measure is intended to encourage the building of houses and apartments.
Where section 83D applies, a refund amounting to some or all of the difference between the old non-residential rate of 2% and current rate of 7.5% may be claimed by the purchaser of the land. The main conditions for availing of the refund are that the purchaser must have paid 7.5% stamp duty when acquiring the land, construction work must have commenced within 30 months of the land being purchased and the residential development must be completed within 30 months of the commencement of construction.
Revenue have published detailed guidance on the operate of section 83D, which is available on their website at www.revenue.ie/en/tax-professionals/tdm/stamp-duty/stamp-duty-manual/part-07-exemptions-and-reliefs-from-stamp-duty/section-83d-residential-development-refund-scheme.pdf.
