The term ‘stamp duty’ refers to an amount charged by government agencies or other public authorities when documents such as deeds, agreements or contracts need their approval before they can be used legally. The word ‘duty’ here has nothing do with taxing but comes from the Old French word ‘dette’ meaning debt. In this article, we will discuss what stamp duty in Ireland is as well as its implications for homeowners and/or property investors in Ireland.
What is stamp duty in Ireland?
In Ireland, stamp duty is a tax imposed on the purchase of property by an individual or a company. It applies to both residential and non-residential properties.
For residential property purchases, the stamp duty is set at a rate of 1% on properties valued under 1 million Euro, and a rate of 2% on the remaining balance – i.e. any amount that exceeds 1 million Euro.
So, for example, if you buy a house worth 700k Euro, the stamp duty would be 7.000 Euro. This excludes VAT which is added on top. In case the property value exceeds one million Euro – say it’s valued at two million Euros – then the stamp duty would amount to 30.000 Euro (1% x 1 million Euro + 2% x 1 million Euro).
For non-residential property purchases, the stamp duty is set at a rate of 7.5% on transaction value before tax.
Who needs to pay stamp duty in Ireland?
Anyone who buys a property in Ireland must pay stamp duty on that purchase. This includes foreigners buying a property in Ireland from abroad.
Who is exempt from paying stamp duty?
The following transactions are exempt from stamp duty:
- Transfers/leases between spouses and civil partners (unless it is subsale)
- Property transferred under court order by former spouse or partner after divorce, dissolution of “civil partnership” to cohabitant; property transfer must happen on or after 1 January 2011.
The stamp duty exemption does not apply if any other person is a party to the instrument.
The exemptions and reliefs that applied to purchases of new residential property no longer apply. The exemptions and reliefs that applied to first-time buyers or owner occupier buyers of residential property also no longer apply. In other words, the first time buyers of residential property are required to pay stamp duty in Ireland.
If you are thinking about immigrating to Ireland via property investment, you may want to consult with a solicitor or an accountant to determine your eligibility for any exemptions and reliefs that may apply.