Stamp duty is a tax charged by Revenue on certain legal documents and transactions in Ireland, such as property purchases and share transfers. Rates range from 1% to 10% depending on the asset type, with reliefs available for first-time buyers and intra-group transfers. It must be paid within 44 days of execution to avoid interest.
Stamp Duty is a tax imposed by the Irish Revenue Commissioners on specific legal documents and transactions, such as the purchase of property or the transfer of shares. This duty is calculated as a percentage of the consideration value involved in the transaction, making it a key cost consideration for buyers and companies engaging in asset transfers.
You encounter Stamp Duty whenever a written instrument requires stamping to be legally admissible in court or effective against third parties. For instance, when acquiring commercial property for your startup, the conveyance document attracts Stamp Duty at rates up to 7.5% for non-residential properties over certain thresholds. Failure to pay promptly results in interest and potential penalties, impacting your cash flow.
Understanding Stamp Duty is crucial for founders planning property acquisitions or share issues, as it directly affects transaction costs and requires adjudication by Revenue before completion. Proper planning, including checking for reliefs, ensures your business avoids unexpected tax liabilities during expansion.
Stamp Duty generates revenue for the state whilst regulating property and share markets by adding friction to speculative transactions. It applies to instruments like leases, mortgages, and agreements for sale, ensuring government oversight on high-value transfers that could affect economic stability.
The tax discourages frequent flipping of assets, stabilising housing and commercial markets vital for Ireland's economy. For businesses, this means budgeting for Stamp Duty when scaling operations through property purchases or consolidating shareholdings via capital allowances planning.
Residential property Stamp Duty stands at 1% on the first €1 million and 2% thereafter, with first-time buyer relief reducing it to 0.5-1% up to €1 million. Commercial property rates are 7.5% generally, dropping to 2.5% for funds buying multiple residential units over 10 in 12 months.
Leases attract 1% of total rent over the term, capped at 20 years. These rates, updated in recent budgets, require verification via Revenue's online tools before contracts exchange to avoid surprises in your financial year end calculations.
Calculate Stamp Duty using Revenue's rates on the higher of market value or consideration. Submit the instrument electronically or by post for adjudication, paying within 44 days via ROS or cheque. Late payment incurs 0.0219% daily tax interest from day 45.
For complex deals, obtain a certificate of adjudication confirming the amount. This stamped document proves payment, essential for Companies Registration Office filings or property registration.
Intra-group share transfers qualify for 90% relief if ownership exceeds 90% and clawback protections apply. Commercial property relief exists for young trained farmers at 50% up to €250,000. Tax relief schemes like these reduce effective costs during restructurings.
First-time buyer top-up relief applies to residential purchases up to €1 million, whilst balancing relief prevents double taxation on mixed-use properties. Consult advisors to structure deals qualifying for these savings.
Stamp Duty falls due 44 days after instrument execution, with electronic stamping instantaneous for simple cases. Extensions rarely granted, so factor into timelines for property closings or share allotments to avoid tax interest.
Non-payment renders documents inadmissible in court, blocking enforcement or registration. Businesses prioritise payment to maintain clean compliance records for investor due diligence.
Yes, transfers of Irish company shares attract 1% Stamp Duty on consideration over €1,000, with exemptions for market makers and intra-group reliefs. This applies even to non-residents, requiring payment regardless of location.
Clearance certificates confirm payment, vital for CRO updates. Founders issuing shares to investors or employees must account for this tax, impacting net proceeds.
