Dáil Éireann Debate, Thursday - 30 November 2017
50. Deputy Pearse Doherty asked the Minister for Finance the grounds on which the increase in commercial stamp duty will be sustainable; the expected revenue achieved; and if he will make a statement on the matter. [50882/17]
Amharc ar fhreagraBudget 2018 includes a change to the rate of Stamp Duty on non-residential property from 2% to 6%, projected to raise €376 million in 2018. This is based on estimates in Revenue’s Pre-Budget Ready Reckoner, which showed the effect of a 0.5% increase in the rate on non-residential property, a €47 million increase in yield – this is multiplied up to €94 million for 1% increase, or €376 million for a 4% increase.
I am advised by Revenue that the yield projection for 2018 is based on receipts for previous years, combined with an ongoing assessment of expected receipts by the end of the current year (2017) and for next year (2018) as well as impacts of earlier policy changes. This process includes assessment of significant once-off transactions that positively increased 2016 receipts but are not expected to reoccur on a regular basis. Failure to account for these once-off transactions would have led to a higher estimate for 2018, therefore the estimate should be considered as conservative and prudent.
Following Budget 2018, Revenue has updated the Ready Reckoner to a Post-Budget basis, taking account of budgetary changes and revised growth forecasts (from the Department of Finance) for 2018. The Post-Budget Ready Reckoner indicates that each 0.5% increase in the rate of Stamp Duty on non-residential property (from the new rate of 6%) is now estimated to raise €49 million.
It is expected that total Stamp Duty receipts from non-residential property will be around €600 million in 2018.
It should be noted the estimates make an assumption of no behavioural change. In the absence of precise and accurate forecasts for transaction volumes in 2018, basing receipts on 2016/2017 levels and trends is the most reasonable option. The estimate also assumes current exemptions and other reliefs remain unchanged.
I am advised by Revenue that adjusting for possible once-off transactions in 2016, receipts in the three year period 2014 to 2016 were quite stable and Revenue's assessment is that it seems reasonable to expect this level of activity is sustainable and for it to continue.
