Stamp Duty and leases
Residential houses and apartments
A lease for a residential house or apartment is exempt from Stamp Duty if:
- the rent is €40,000 or less per year
- the period of the lease is 35 years or less or is for an indefinite period.
If you executed (signed, sealed or both) the lease before 25 December 2017, the annual rent is €30,000.
You do not file a Stamp Duty return when this exemption applies.
Mary agrees to let an apartment to John for 12 months at a rent of €2,000 per month.
The annual rent is €24,000.
As the rent that John will pay in the year is under €40,000, the lease is exempt from Stamp Duty.
John does not file a Stamp Duty return.
Stamp Duty is chargeable on all other residential leases unless you can claim a different exemption or relief.
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
- in the Lease of Easements.
You do not file a Stamp Duty return.
Next: Agreements, assignments and surrenders