Repayment of Stamp Duty where land is used for residential development (S83D)
Conditions to avoid a clawback of a repayment
Revenue will claw back (withdraw) a repayment of Stamp Duty where you claimed a repayment you were not entitled to. For example, if you did not commence the building work pursuant to a commencement notice.
Revenue will also claw back a repayment of Stamp Duty if you fail to meet the conditions to avoid a clawback of a repayment. Condition 1 applies in relation to all residential developments. Condition 2 applies in relation to multi-unit developments only.
A repayment should not be claimed where it is known or anticipated that any of the conditions to avoid a clawback of a repayment will not be satisfied.
Where a repayment is clawed back, you must repay to Revenue the amount of Stamp Duty that was repaid to you, plus interest. Interest is charged on the clawback amount at a daily rate of 0.0219% until you repay it to Revenue.
Condition 1 – completion within specified period
Building work must be completed within 30 months of the date the building control authority acknowledges the commencement notice as valid. This timeline is extended to 36 months where the development is a large-scale residential development.
When you complete multi-unit building work, you must submit a ‘Certificate of Compliance on Completion’ to your Local Authority. The completion date is the date your Local Authority registers the certificate.
If you build a single dwelling unit, you can opt out of the Local Authority certification process. If you opt out, the completion date is the date of the ‘Electrical Completion Certificate’. You receive this certificate when the house is connected to the electricity network.
- Example 1
Orla purchases a site on 12 October 2022 and Stamp Duty is paid. Having obtained planning permission to build a house on the site, Orla lodges a commencement notice with her local authority. This is acknowledged as valid on 10 March 2023. Orla has 30 months from this date to complete building, which means that it must be completed by 10 September 2025.
Orla starts building immediately and is entitled to claim a repayment.
However, building works take longer than expected. The house is not completed until 18 November 2025, 32 months after the commencement notice was acknowledged as valid. This means that the repayment will be clawed back.
Condition 2 – 75% test
For multi-unit developments, the ‘75% test’ must be satisfied. There are two tests that can be used to satisfy the 75% test:
- Footprint test - dwelling units must occupy at least 75% of the total surface area. This normally applies to houses.
- Gross floor space test - the dwelling units must cover the gross floor area. This is the area covered by internal measurements of the floor space of each floor of a dwelling unit. The measurement includes the internal walls and partitions. This normally applies to apartment blocks.
- Example 2
A builder buys a 0.5-hectare site for €1,000,000 on which he plans to build 20 houses. He pays the Stamp Duty and claims a repayment under the repayment scheme.
After completion, the houses and their curtilage cover 60% of the site, instead of the required 75%. The repayment will be clawed back.
This 75% test does not apply to single dwelling units. For a single dwelling unit, you can claim a repayment for the area covered by the house itself (the ‘footprint’ of the house) and up to 0.4047 hectares (one acre).
For detailed guidance on these conditions, refer to the Revenue Guidance document.
Next: Residential development built in phases