Following yesterday’s Budget 2020 the following are some key points to be aware of regarding property-related matters:
Stamp duty payable on the acquisition of non-residential property (commercial property generally) has been increased by 1.5% to 7.5%, effective immediately. It is expected that the usual transitional arrangements will apply in respect of transactions where a binding contract was in existence prior to the budget (i.e. dated 7 October 2019) and the deed is stamped by 31 December 2019, where the current 6% duty will apply.
The stamp duty refund scheme applicable where dwelling units are constructed on the property, subject to certain conditions (e.g. construction must have started within 30 months of the date of the transfer of the land), is expected to be adjusted to take account of the increase in stamp duty payable on acquisition, with a view to maintaining the effective 2% rate.
Capital Gains Tax and Capital Acquisitions Tax rates remain unchanged at 33%.
The inheritance threshold has been increased by €15,000.00 from the current €320,000 to €335,000. Other group thresholds remain unchanged.
The Help to Buy Scheme has been extended by two years to 31 December 2021.
€2.5 billion is to be made available to the Housing Programme and capital funding of €1.1 billion is to be allocated to support the delivery of 11,000 new social homes in 2020 with a further 12,000 units intended for 2021.
Steps are being introduced in an effort to mitigate against some of the tax avoidance measures operated by some Irish Real Estate Funds (IREF’s) and Real Estate Investment Trusts (REIT’s), in order to ensure that an appropriate level of tax is paid by such vehicles.