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Stamp Duty and leases

  1. Overview
  2. Residential houses and apartments
  3. Agreements, assignments and surrenders
  4. Difference between a lease and a license
  5. Rates
  6. Paying Stamp Duty on residential leases
  7. Varying a lease
  8. Transitional arrangements

Rates

Average Annual Rent

You pay Stamp Duty on the average annual rent. The Stamp Duty rate you pay depends on the period of the lease. The rates are set out below.

Stamp Duty rate on average annual rent*
Period of the leaseStamp Duty rate on average annual rent

Not exceeding 35 years or indefinite

1%

Exceeding 35 years but not exceeding 100 years

6%

More than 100 years

12%

*these rates predate the Stamp Duties Consolidation Act 1999

  • Example 1

    The period of the lease is 20 years.

    The rent for the first 10 years is €30,000 per year.

    For years 11 to 15, the rent is €40,000 per year and for years 15 to 20 it is €45,000 per year.

    The total rent payable over the 20 years is €725,000.

    The average annual rent is €36,250 (€725,000 ÷ 20).

    You pay Stamp Duty on €36,250 at the rate of 1%.

  • Example 2

    The period of the lease is 36 years.

    The rent for the first 5 years is €30,000 per year.

    The lease contains a rent review clause.

    The rent for year 6 onwards will be negotiated in accordance with that clause.

    The total rent payable for the first 5 years is €150,000.

    The average annual rent is €30,000 (€150,000 ÷ 5).

    You pay Stamp Duty on €30,000 at the rate of 6%.

    You also pay a fixed duty of €12.50 for the rent review clause.

Premium

The rate you pay on a premium depends on the type of property covered by the lease.

If the property is residential, you pay the same Stamp Duty rate that you would pay on a transfer of residential property.

If the property is non-residential, you pay the same Stamp Duty rate that you would pay on a transfer of non-residential property.

The current Stamp Duty rates are set out below.

Stamp Duty rates on land and buildings
Type of propertyConsiderationStamp Duty Rate
Residential First €1 million 1%
Residential Excess over €1 million 2%
Non-residential - 7.5%

Note

The 7.5% rate applies to instruments (written documents) executed (signed, sealed or both) on or after 9 October 2019.

 

Budget 2020 provides for transitional arrangements. 

Under the arrangements:

  • where there is a binding contract in place before 9 October 2019
  • and
  • the instrument of transfer is executed before 1 January 2020
  • and
  • the instrument contains a certificate

you pay Stamp Duty at the pre-Budget rate of 6%.

The wording of the certificate is:

"It is hereby certified that this instrument was executed solely in pursuance of a binding contract entered into before 9 October 2019."

The Finance Act 2017 increased the rate from 2% to 6%.  The Act provided for transitional arrangements.

If the property is part-residential and part non-residential, you pay the:

  • Stamp Duty rate that applies to residential property on the residential part
  • and
  • Stamp Duty rate that applies to non-residential rate on the non-residential part.

Fixed Duty

You pay a fixed Stamp Duty of €12.50 for each of the following:

  • a lease made at a later date for an agreement already stamped
  • any other lease relating to Irish land and buildings, or a right or interest in Irish land and buildings
  • a rent review clause (you also pay Stamp Duty on the lease containing the rent review clause).

Next: Paying Stamp Duty on residential leases

Published: 04 February 2022 Print this page

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