Transfers of Property
- Conveyances/Transfers of Property
- Conveyances/Transfers of property other than shares, stocks or marketable securities or policies of (life and non-life) insurance
- Conveyances/Transfers of shares, stocks or marketable securities
- Assignments of policies of (life and non-life) insurance
- VAT and Stamp Duty
- Special Rules
Instruments (i.e. written documents) that convey or transfer ownership of property, including an interest in property, are chargeable to stamp duty if they are executed (e.g. signed) in Ireland or, if executed outside Ireland, they relate to property situated within Ireland or something done or to be done in Ireland.
The charge to stamp duty is contained in Section 2 of the Stamp Duties Consolidation Act 1999 (SDCA). For more information on the charge to stamp duty, please see Stamp Duty – Notes for Guidance and the Stamp Duty Tax & Duty Manual.
Though an instrument may be chargeable to stamp duty, an exemption or relief from that charge may be available. For more information, please see Exemptions/Reliefs.
There is no definition of "property" in stamp duty law. The Oxford Dictionary defines it as "a thing or things belonging to someone". So "property" is something that belongs to one person. Because property belongs to a person, that person may transfer ownership of it to another.
Examples of an interest in property include-
- easements, i.e. a right over the property of another such as rights of way, rights of support, rights to light;
- profit à prendre, i.e. a right to take something from the land, such as fishing or shooting rights or rights to cut turf;
- a wayleave or other right to lay cables, pipes, wires or other conduits.
A person may transfer their ownership of property in many cases without the need for an instrument. For example, the contents of a house can be handed over to the new owner. However, when it comes to transferring ownership of property such as land and buildings or shares in companies, an instrument is normally needed.
The rate of stamp duty applicable to the instrument depends on the type of property being conveyed or transferred.
For information on the rates of stamp duty applicable to-
- conveyances or transfers of shares, stocks or marketable securities, please see Shares, Stocks or Marketable Securities;
- assignments (i.e. transfers) of policies of insurance or policies of life insurance, please see Rates of Stamp Duty;
- all other conveyances or transfers (including conveyances and transfers of land and buildings), please see Rates of Stamp Duty.
The amount on which stamp duty is chargeable is usually the amount of money (i.e. consideration) paid for the property (please see sections 6 and 7).
Agreements or contracts to sell property are not chargeable to stamp duty unless they are caught by the provisions of-
- Section 31 (Certain contracts to be chargeable as conveyances on sale) of the Stamp Duties Consolidation Act 1999 (SDCA). This Section charges to stamp duty contracts such as Business Asset Purchase Agreements as if they were a conveyance or transfer of property;
- Section 31A (Resting in contract) of the SDCA; or
- Section 31B (Licence agreements) of the SDCA.
You should not present the instrument to Revenue. Rather you should complete and file a stamp duty return and pay the duty (and interest and penalties/surcharges if they apply) due. For information on filing a stamp duty return and paying the duty, please see Filing Stamp Duty Returns.
Conveyances/Transfers of property other than shares, stocks or marketable securities or policies of (life and non-life) insurance
Residential property for stamp duty purposes means:
- a building or part of a building which, at the date of the conveyance (or lease):
- was used or was suitable for use as a dwelling;
- was in the course of being constructed or adapted for use as a dwelling; or
- had been constructed or adapted for use as a dwelling and had not since such construction or adaptation been adapted for any other use - this would include, for example, a derelict house; and
- the curtilage (i.e. the normal domestic out-houses, yard, garden, etc.) of the residential property up to an area (exclusive of the site of the residential property) of one acre.
The definition of "residential property" is linked to the operation of the rating system so that a building which was originally built for non-residential use - such as a schoolhouse, garda station, church, shop, post office, or a barn – and which is being purchased, for example, for restoration as a dwelling will not be regarded as residential property in circumstances where the property was rated as a commercial building in the calendar year prior to the purchase.
If the building is mixed use – for example, living quarters over a shop – then the shop will not be regarded as residential property in circumstances where the building was rated as a mixed property in the calendar year prior to the purchase.
If the building was originally built for non-residential use (or part of it was originally built for non-residential use), please contact the local authority concerned to establish how the building was rated in the previous calendar year. If the whole of it (or part of it) was rated as a commercial building, then the whole (or part) is non-residential property for stamp duty purposes.
Where a transaction involving residential property forms part of a larger transaction or of a series of transactions the stamp duty liability is calculated on the basis of the consideration paid for the larger or series of transactions i.e. stamp duty is payable on the aggregate consideration. Where the properties are conveyed or transferred by separate instruments, the duty is apportioned between the separate properties. The apportionment is pro rata to the consideration paid for each property.
As part of a larger transaction two houses are purchased in February 2015 for a total of €1,200,000 (€800,000 for House A and €400,000 for House B). Two instruments of transfer are executed, one for House A and one for House B.
Stamp duty is calculated on the aggregate consideration of €1,200,000 at the stamp duty rate of 2% i.e. €14,000.
The duty is then apportioned so that the instrument transferring:
- House A attracts stamp duty of €9,333 (i.e. €14,000 x €800,000) / €1,200,000 = €9,333;
- House B attracts stamp duty of €4,667 (i.e. €14,000 x €400,000) / €1,200,000 = €4,667.
Non-residential property means property which is not residential property. Examples include land (agricultural and non-agricultural), sites, offices, factories, shops, public houses, other business/commercial premises, options over land, interests in land such as wayleaves and easements, business assets such as goodwill and book debts.
Special rules apply to the purchase of a site in connection with, or as part of, an arrangement to build a house or apartment on that site. In these cases stamp duty is chargeable on the total of the site cost and the building cost but at the stamp duty rate appropriate to residential property.
Date of instrument: 6 May 2015
Site cost: €50,000
Building cost: €165,000
Aggregate cost: €215,000
Stamp duty payable: €2150 (i.e. €215,000 @ 1%)
Where a site is purchased and there is no connected agreement to build a house or apartment, the transfer of the site is chargeable at the appropriate rate for non-residential property.
Date of instrument: 15 April 2015
Site cost:: €50,000
Stamp duty payable: €1,000 (i.e. €50,000 @ 2%)
Where a transaction relates to a mixed use property (i.e. a property which consists of residential and non-residential property), the consideration must be apportioned on a just and reasonable basis between the residential and non-residential elements. The accountable person should keep a record of how the decision to apportion the consideration was reached.
Stamp duty is chargeable on the residential element at the stamp duty rate appropriate to residential property and on the non-residential element at the rate appropriate to non-residential property.
On 30 May 2016 John purchased a building for €1,200,000 which comprised a shop on the ground floor and an apartment overhead.
John apportioned €900,000 to the shop and €300,000 to the apartment. John based his apportionment on a valuation of the properties that he had received from an independent valuer.
The stamp duty payable is €21,000 (i.e. (€900,000 @ 2% (the rate applicable to non-residential property) + (€300,000 @ 1% (the rate applicable to residential property))
For more information, please see Shares, Stocks or Marketable Securities.
The assignment (i.e. transfer) of a policy of insurance or a policy of life insurance where the risk to which the policy relates is located in Ireland is chargeable to stamp duty.
The rules for determining where risk is located are set out in Section 61 of the SDCA. For more information on this section, please see Stamp Duty – Notes for Guidance and the Stamp Duty Tax & Duty Manual.
Stamp duty is assessed on the VAT exclusive consideration.
An example of how to calculate the VAT exclusive consideration based on the current 13.5% rate of VAT is set out below:
A new house is purchased for a consideration of €400,000 which includes VAT at 13.5%.
To calculate the VAT exclusive consideration, divide €400,000 by 113.5 and multiply the result by 100 i.e. (400,000 ÷ 113.5) x 100 = €352,422.90.
The VAT exclusive consideration is €352,422.90.
- no consideration (e.g. money) is paid for the property, or
- the consideration paid is less than the market value of the property,
the conveyance or transfer is treated as a gift and stamp duty is chargeable on the market value of the property.
There are many rules in the SDCA that apply to conveyances and transfers of property. The ones most likely to come up in practice are mentioned below.
(a) Exchanges, partitions, releases and surrenders of property
Sections 37, 38, 63 and 67 of the SDCA, respectively, deal with exchanges, partitions, releases and surrenders of property.
(b) Consideration does not consist entirely of money
Where a property is being purchased and the whole or part of the consideration is not money, special rules apply. For example, the consideration may consist of taking over responsibility for paying off a debt that the seller or transferor of the property owes.
(c) Full amount of the consideration is not known at the time the instrument is being executed ("unascertained consideration")
It the full amount of money which the purchaser is going to pay for the property is not known at the time the instrument is being executed (e.g. signed), section 44 of the SDCA applies and stamp duty is chargeable on the market value of the property.
For information on a Revenue practice in this area, please see Stamp Duty and Unascertained Consideration.
This document is intended for guidance only. While every effort is made to ensure the accuracy of the content, it does not purport to be a legal interpretation of the relevant provisions and has no binding in law. Responsibility cannot be accepted for any liability incurred or loss suffered as a consequence of relying on any matter published herein.
Issued by the National Stamp Duty Office – July 2016