Stamp Duty and Property
What is residential property?
A house or apartment that is used as a dwelling is residential property for Stamp Duty purposes.
Residential property also includes buildings, or parts of buildings, that:
- are suitable for use as a dwelling
- are in the course of being built, or adapted for use, as a dwelling
- were built or adapted for use as a dwelling and not subsequently used for any other purpose.
Curtilage up to an area of one acre is also residential property. Curtilage includes gardens, paths, driveways, yards, garages or sheds used in conjunction with a house. It does not include the site of the house. If the curtilage exceeds one acre, the area in excess is non-residential property.
- Example 1
Tom buys a second-hand house on 0.5 acres for €200,000.
The whole of the area around the house comprises gardens, a driveway and a footpath.
The 0.5 acres is residential property.
- Example 2
Mary buys a house on 1.5 acre for €400,000.
The whole of the area around the house comprises gardens, footpaths, the driveway and a shed.
Only one acre is residential property. The other 0.5 acres is non-residential property.
- Example 3
Joan buys a house on 3 acres for €300,000.
The area around the house comprises a small garden, footpaths, driveways and agricultural land.
The house and curtilage account for 0.4 acre.
0.4 acres is residential property. The other 2.6 acres is non-residential property.
The property must be residential on the date of execution (signing, sealing or both) of the instrument (written document) transferring the property.
However, the definition links to the rating system operated by local authorities. If, on 31 December in the calendar year before the transfer, the rating of:
- the building was non-residential
- any part of the building was non-residential,
you treat the building, or the part rated as non-residential, as non-residential property for Stamp Duty purposes.
You may have planning permission to change the use of a building to residential before the building is transferred to you. Or you may have planning permission to build a house on a site. Planning permission does not make the building or the site residential and you cannot take it into account.
For Stamp Duty purposes residential property includes a derelict house. You will need a Local Property Tax (PT) Property ID number to file the Stamp Duty return. For more information, see Details needed to file a return.
A residential property is not liable for LPT if it is both unsuitable as a dwelling and is unoccupied. For more information please see Properties unsuitable for use as dwelling.
Residential property bought as an investment
You may buy a residential property that is leased to tenants. Or you may buy a residential property intending to lease it to tenants. For Stamp Duty purposes the property is residential if it meets the definition of residential property set out above.
Buying a site
A site is non-residential property. However, if you buy a site with a connected agreement to build residential property on it, the site is residential property. You pay Stamp Duty on the site cost plus the cost of the building, exclusive of any Value-Added Tax (VAT).
- agreement to buy the site
- the building agreement
are connected if you cannot have the site transferred to you without the residential property being built on it.
- Example 4
John enters into a contract to buy a site from XYZ Ltd, a vendor/developer, for €50,000.
The contract provides that John must also enter into a building agreement with XYZ Ltd to build a house on the site.
John enters into the building agreement.
In the building agreement XYZ Ltd undertakes to build a house on the site for John for €250,000 (excluding VAT).
After the house is built an instrument is executed to transfer the site to John. The site is residential property. John must pay Stamp Duty on €300,000 at the Stamp Duty rate applicable to transfers of residential property.
The building works may not have been commenced or been completed at the date of execution of the instrument. The Stamp Duty position is the same. John would pay Stamp Duty on €300,000 at the Stamp Duty rate applicable to transfers of residential property.
Next: Non-residential property