Published on March 18th, 2015 | by Martin Clancy
Stamp Duty Explained
Stamp Duty is the tax levied by the Government for changing the documents that specify who owns a particular property irrespective of whether it’s a new build or second-hand property. It’s thought to have originated in Spain and goes back to the days when a physical stamp (a revenue stamp) had to be attached to a document to show that duty had been paid.
How much is Stamp Duty?
The amount is based on the type and cost of the property and whether it is a residential or non-residential property.
For residential property, it is calculated at 1% of the selling price of any property up to €1m. For amounts above €1m you will be charged 2%.
If you buy a home that is worth €300,000, you will pay stamp duty of €3,000.
It is worth noting that stamp duty is not part of your mortgage and needs to be saved separately to what you have for your deposit.
Buying a New Build?
VAT is charged on new build homes but not on second-hand homes.
If you are buying a new build, then you will only pay Stamp Duty on the base price. Not the price including VAT.
If you paid €227,000 (including VAT) for your new house, this is made up of the base price of €200,000 plus 13.5% VAT (€27,000).
In this case you only pay stamp duty on the base price of €200,000, so your Stamp Duty will be €2,000.
Who do I pay my Stamp Duty to?
When closing a sale your solicitor will calculate the stamp duty you owe to the Revenue Commissioners.
A single rate of 2% applies to all non-residential property.
Buying a site?
If you buy a site with an arrangement to build a house on it, then stamp duty will be charged at the residential rate on the total of the site and the building cost.
If you buy a site with no connected arrangement to build a house or apartment on it, then stamp duty will be charged on the site cost at the non-residential property rate.
For more information check out the Revenue Commissioners page on Stamp Duty.