In 2021, I introduced a higher 10% rate of stamp duty on multiple purchases of residential properties. The rate was introduced by Financial Resolution on 19 May 2021 and is provided for by section 31E of the Stamp Duties Consolidation Act 1999. It applies where a person buys 10 or more residential properties, excluding apartments, in any 12-month period. The background to the introduction of the measure was the purchase by institutional investors of all, or a significant proportion of, residential housing estates, thus denying first-time buyers an opportunity to purchase a home. The 10% rate is intended to provide a significant disincentive to this practice.
To ensure that the higher rate of duty does not have an adverse impact on the delivery of social and affordable housing in the State, section 31E contains a specific exemption from the 10% rate of duty for residential units that are leased to a local authority for onward leasing to a household that qualifies for social housing support. The relief is intended to apply in respect of residential units acquired under the ‘mortgage-to-rent’ scheme. I have also introduced two specific repayment schemes in relation to section 31E, which are provided for by sections 83E and section 83F of the Stamp Duties Consolidation Act 1999.
Section 83E, which was introduced by the Finance (Covid-19 and Miscellaneous Provisions) Act 2021, provides for a partial repayment of stamp duty paid at the higher 10% rate where, within 2 years of acquisition, a property is leased to a local authority or an approved housing body for the purpose of social housing. Section 83F, which was introduced by the Finance (Covid-19 and Miscellaneous Provisions) Act 2022, provides for a partial repayment where, within 6 months of acquisition, a property is designated as a “cost rental dwelling”. In the case of both schemes, the amount to be repaid is the difference between the amount of stamp duty paid at the higher 10% rate and the amount of duty that would have been payable had the standard rate applied.
Home reversion is a form of equity release product. In essence, such products involve the Home Reversion Firm buying a share of a person’s home in exchange for a lump sum payment.
They are specialised products which may suit the personal circumstances of certain cohorts of home owners. In particular they may be suitable products for a person who owns their home but do not have sufficient income or other means to make repayments on a standard re-mortgage or other type of loan.
Home reversion products are defined in the Central Bank Act 1997 and any firm seeking to offer such products must be authorised by the Central Bank to do so.
Currently, there is no specific exemption or repayment scheme available covering home reversion products in respect of section 31E of SDCA 1999.
