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Everything You Need to Know about Stamp Duty on Irish Residential Properties

Stamp Duty is something that catches a lot of First Time Buyers by surprise. They get their solicitor quote and see an extra charge for for several thousand Euro which they had not budgeted for.

What is Stamp Duty and why do we have to pay it?

Stamp Duty is a tax on the documentation needed to transfer the ownership of a property from one person or entity to another.

Stamp Duty generates 100s of millions in revenue every year an so has become an important generator for Ireland's total tax base.

For most properties, calculating stamp duty is straight forward. 1% of the purchase price (ex vat for new builds) up to €1m
Calculating Stamp Duty

How is Stamp Duty Calculated on Second Hand Properties

At the time of writing this post, Stamp Duty in Ireland is charged at a rate of:

  • 1% of the Property Price up to €1,000,000

  • 2% of the Property price on anything over €1,000,000

So, if you purchase a second hand house for €400,000 the Stamp Duty would be calculated as follows:

  • 1% of €400,000 = €4,000

  • Total Stamp Duty = €4,000

So for most people, the Stamp Duty can be calculated by just getting 1% of the purchase price. It does get a little more complicated when the purchase price is over €1m.

For example, If the purchase price of a property was €1,250,000, the Stamp Duty would be calculated as follows:

  • 1% of the first €1,000,000 = €10,000

  • 2% of the remaining €250,000 = €5,000

  • Total Stamp Duty = €15,000

How is Stamp Duty Calculated on New Builds

The rates of Stamp Duty is the same on New Builds, however Stamp Duty is not charged on the Vat which is paid as part of the price of new builds.

For example, if you buy a new build for €450,000, that cost is made up of €396,476 + vat of €53,524.

The Stamp Duty will only apply to the €396,476 and so would be €3,964

To calculate the cost of a new built without vat, simply divide the purchase price by 1.135 as vat is 13.5% on new properties.

So as painful as that is, if you are buying a new build you pay 2 different taxes, Vat of 13.5% and Stamp Duty of 1%.

What Properties does Stamp Duty apply to?

Stamp Duty applies to the purchase of all:

  • Residential Houses

  • Residential Apartments

  • Sites which are intended for building residential properties.

Are there any Exemptions?

There are some exemptions for situations like a separation or divorce where the property is transferred from one spouse to another.

There is also some relief for farmland being transferred between family members.

In the past, there were various exemptions for First Time Buyers and different thresholds for when Stamp Duty would kick in, however today those no longer exist.

How and When is Stamp Duty paid?

Stamp Duty is paid upon completion of the purchase of a property. Your solicitor will ensure the Stamp Duty is recorded as part of the conveyancing process and transfer the funds to Revenue.

This means you will send the funds for Stamp Duty to your solicitor as you are settling their bill just before closing.

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