News for those who, as a result of buying and selling real estate, have had to venture into legal wilderness.
In a circular issued today, the Inland Revenue has explained its new guidelines on stamp duty introduced by the Stability Act from 1st January 2014.
By stamp duty we mean the fee payable to the state to register certain legal contracts. Inland Revenue has explained that in real estate transfers which are VAT exempt (those between private individuals) there are three stamp duty rates: 2% for first homes (these have gone down from the previous 3%), 9% for all other property (an increase on the previous 7% for buildings and 8% for non-agricultural building land), 12% for agricultural land and related assets if the sale is not in favour of farmers and professional farming businesses.
In any case, the tax paid cannot be less than 1,000 euros.
Furthermore the amount of each stamp duty has been raised from 168 to 200 euros - mortgage and land registry duties - set at a fixed rate for property subject to VAT. For property which is not subject to VAT, however, the mortgage and land registry taxes are fixed at €50 euros each. An example: those buying their first house from a private individual will have to pay a stamp duty of 2% plus 100 euro mortgage and land registry tax. If it is not their first house, stamp duty is 9%.
Anyone who buys a house from a builder will have to pay VAT and 200 euros of mortgage and land registry tax in addition to the stamp duty of 2% or 9% (depending on whether it is their first home or not).