Q: I am buying land in ROI and have been imputed the 6 per cent rate of stamp duty – before October 11 2017 the rate was 2 per cent. Can I get any of this back if I build my home on this plot of land?
A: The rates of stamp duty on land are as follows:
Residential (First €1 million) – 1 per cent
Residential (Excess over €1 million) – 2 per cent
Non-residential – 6 per cent
Residential property for stamp duty purposes means a building, or part of a building which, at the date the instrument (written document transferring ownership) was executed, was used, or was suitable for use, as a dwelling, was in the course of being built, or adapted for use, as a dwelling or had been built or adapted for use as a dwelling, and had not since been adapted for any other use. Residential property also means an area of up to one acre attached to the residential property (for example, the garden or yard), excluding the site of the residential property.
The 6 per cent rate on non-residential property was introduced on budget day by way of financial resolution for conveyances executed on or after 11 October 2017. Non-residential land includes vacant sites, whether or not they are zoned for housing.
The Finance Bill 2017 contains a measure which provides for a partial refund of stamp duty paid on the acquisition of non-residential land where that land is used for the development of housing. The measure, if enacted, will allow for a refund of up to two thirds of the stamp duty paid on the acquisition of the site for the purpose of residential property development. The refund scheme will apply to both one-off houses and to larger housing developments.
The main conditions for availing of the refund are that the purchaser must have paid 6 per cent stamp duty when acquiring the land, construction work must have commenced within 30 months of the land being purchased and the home(s) must be completed within two years of the commencement of construction.
UPDATE 18/05/2018: Part 7 of the Stamp Duty Manual has been updated to include a new chapter 14 which outlines the provisions of section 83D of the Act. This section, introduced in Finance Act 2017, provides for a stamp duty refund scheme where land that is chargeable at the 6% non-residential rate of stamp duty is subsequently developed for residential purposes.Update July 2018: Full details are available on the Revenue website.Update November 2019: The rate for non-residential stamp duty has increased to 7.5 per cent in Budget 2020.