Stamp Duty and Property

Certain property deriving its value from immovable property

The Finance Act 2017 introduced new rules relating to Stamp Duty on certain property deriving its value from immovable property. These rules can be found in Section 31C of the Stamp Duties Consolidation Act, 1999. The rules apply to instruments (written documents) executed (signed, sealed or both) on or after 6 December 2017.

Under these rules, Stamp Duty is paid on written agreements or contracts to buy:

• shares, stocks or marketable securities (other than shares in certain investment companies) (‘shares’)
• units in an Irish Real Estate Fund (IREF) (‘units’)
• interests in partnerships (‘interests’)

where certain conditions are met.

The conditions where you pay Stamp Duty are:

• the shares, units or interests must get their value or the greater part of their value from immovable property
• the immovable property must be non-residential property
• the purchase must result in a change in control over the company, IREF or partnership
• the purchase must result in a change in control over the immovable property owned by the company, IREF or partnership
• the company, IREF or partnership must deal in land or develop land for non-residential purposes.

Note

Control may be exercised directly or indirectly.

Where the agreement or contract meets these conditions, you pay Stamp Duty at the rate of 7.5%.

You may have to pay Stamp Duty if you do not have a written agreement or contract.

• You will pay Stamp duty on the instrument where; the above conditions are met
• and
• you have an instrument transferring ownership of the shares, units or interests to you.

The Stamp Duty rate is 7.5%.

When Section 31C applies, the shares, units or interests are deemed to be land for the purposes of the Residential Development Stamp Duty Refund Scheme.

Transitional arrangements

The Finance Act 2017 contained transitional arrangements. Under the transitional arrangements:

• where there is a binding contract to sell shares, units or interests in place before 6 December 2017
• the instrument transferring ownership is executed before 1 March 2018
• that instrument contains a certificate

the Stamp Duty position is the same as that which applied prior to the introduction of Section 31C.

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 6 December 2017."

Note

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

Budget 2020 provides for transitional arrangements. Under the arrangements:

• where there is 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"

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