Leases of land and buildings
Residential houses and apartments
A lease for a residential property (houses and apartments) is exempt from Stamp Duty if:
- the period of the lease is 35 years or less, or an indefinite period
- and
- the annual rent is €50,000 or less.
Note
If the lease was executed (signed, sealed or both) before 18 December 2023, please refer to Section 2.1 of the Tax and Duty Manual Schedule 1 - Stamp Duties on Leases for the previous thresholds.
You do not file a Stamp Duty Return when this exemption applies.
- Example
Mary agrees to let an apartment to John for 12 months at a rent of €3,500 per month. The annual rent is €42,000.
As the rent that John will pay in the year is under €50,000, the lease is exempt from Stamp Duty.
John does not file a Stamp Duty Return.
Common areas in newly built apartment blocks
Landowners must transfer common areas to an Owners Management Company (OMC). Common areas include entrance halls, staircases, landings, entrance roads, footpaths and garden areas. This is set out in Section 3(1)(b) of the Multi-Unit Developments Act 2011 (MUD Act). The landowner must transfer the common areas before any new apartment is sold.
When the landowner transfers the common areas to the OMC, he or she retains the beneficial interest. This allows the OMC to be registered as the legal owner of the common areas. However, the OMC own the common areas for the benefit of the landowner. This is in accordance with Section 3(7) of the MUD Act.
Stamp Duty is not chargeable on the transfer to the OMC because the beneficial interest remains with the landowner. You do not file a Stamp Duty Return. This is the case even if the instrument transferring the common areas to the OMC is for consideration.
Section 11 of the MUD Act provides that the beneficial interest in the common areas passes to the OMC on completion of the development. The landowner must make a statutory declaration confirming this. Stamp Duty is not chargeable on the statutory declaration. You do not file a Stamp Duty Return.
Lease of easements
In the case of the purchase of an apartment, it is usual for the lease to grant rights of way to access the common areas. Alternatively, there may be a separate instrument (written document), usually called a "Lease of Easements", granting similar rights.
Once Stamp Duty has been paid on the lease, it is not separately chargeable on the rights of way. This is the case whether those rights are granted:
- in the lease
- or
- in the Lease of Easements.
You do not file a Stamp Duty Return.
Purchasing an apartment by way of a lease
A charge to Stamp Duty under the lease head of charge arises on the creation of a lease and in certain other limited circumstances. However, a subsequent assignment or transfer of a leasehold interest is chargeable to Stamp Duty under the Conveyance or Transfer on Sale head of charge.
- Example
Sam purchases an apartment with a leasehold title for a term of 999 years. A lease is created for that term and the lease is stamped under the lease head of charge.
Three years later, Sam sells his apartment to David by assigning the unexpired term of the apartment (the 996 years left to run) to David. The deed recites that Sam is assigning the unexpired term for a consideration of €250,000. This assignment is stamped under the Conveyance or Transfer on Sale head of charge.
Next: Agreements, assignments and surrenders