Section 90 of Finance Bill 2024, as published, amends Schedule 1 to the Stamp Duties Consolidation Act 1999. It gives effect to a Financial Resolution passed by the Dáil on Budget night to increase the standard rates of Stamp Duty payable on transfers of residential property and the higher rate of Stamp Duty payable on bulk acquisitions of houses.
In respect of the first of those, prior to the passing of the Financial Resolution, the standard rates of Stamp Duty applying on transfers of residential property were 1 per cent on the consideration up to €1 million and 2 per cent on the balance. The Financial Resolution, which this amendment gives effect to, introduced
a third rate of 6 per cent, which applies where the consideration exceeds €1.5 million.
Implementing the new 6 per cent rate is primarily a revenue raising measure. However, I was also conscious when making this decision that residential property prices have increased significantly since the rates were last changed in 2010. It seems both logical and fair that higher value homes should be subject to a higher Stamp Duty rate, if only to help generate additional revenue for the State. Stamp Duty on property should have an element of progressivity built into it.
The new 6 per cent rate will be disapplied where three or more apartments in the same block of apartments are being acquired in an aggregated fashion, that is at one overall price using the same instrument of transfer. In such cases, the rates that will apply are 1 per cent on the amount or value of the first €1,000,000 of the consideration and 2 per cent on the balance.
The policy intention of the 6 per cent rate is to apply to the purchase of individual high value properties. It is intended as both an equity and revenue raising measure.
Where an acquisition of 3 or more apartments is made in a disaggregated fashion, the new 6 per cent Stamp Duty rate will apply to any value of each apartment that exceeds €1.5 million.
The acquisition of blocks of apartments by investment funds with the intention of placing them on the rental market remains a significant source of such apartments, and therefore continues to play an important role in overall housing supply.
Following the introduction of the new 6 per cent Stamp Duty rate, aggregated purchases of multiple apartments in the same transaction could potentially have triggered the new higher rate, and possibly for a significant portion of the overall value.
It is not the policy intention of this measure to make the development of apartments economically unviable. Apartments, including privately owned rental apartments, have an important role in the Government’s overall housing strategy.
Apartment development is cost intensive. It is generally not considered economically viable for developers to progress high-density apartment development, or for lenders to deploy capital (equity and debt) to such schemes, without either a forward committed purchase or forward funding arrangement in place prior to commencement. Such an arrangement is usually put in place with an institutional investor with sufficient balance sheet capacity.
Following the passage of the Financial Resolution, from midnight on 1 October the revised rates of Stamp Duty apply to any deed of conveyance or transfer or long lease of residential property that is executed after that date. Transitional arrangements apply where there is a binding contract that was in place on or before that date, and the deed or lease is executed before 1 January 2025. In such circumstances, the purchaser can benefit from the rates that previously applied.