Law Society head hits out at Donohoe over stamp duty
THE president of the Law Society has written to Finance Minister Paschal Donohoe to complain about “absurd and unfair” transitional arrangements for stamp duty on non-residential property.
Stuart Gilhooly claims the arrangements are delaying transactions, and asked for the problem to be solved “immediately” through legislation.
Mr Donohoe hiked the stamp duty on non-residential property transactions from 2pc to 6pc in Budget 2018 earlier this month.
Mr Gilhooly said in his letter that solicitors have been advised by Revenue that there are some cases where the 6pc rate should be paid, but the difference between the old rate and the new rate would be refunded at a later date. These are transactions where a binding contract had been agreed before October 11, 2017, and the deed of assurance contains a particular Revenue certificate and is executed before January 1, 2018.
Mr Gilhooly said solicitors had been told that the refunds would not be paid until after the Finance Bill is enacted.
“This, in practice, could result in refunds being delayed until January 2018 at the earliest. Not only is it absurd and unfair for purchasers to be asked to pay tax which no-one intends they will be ultimately liable for, the current farcical position imposes an undue administrative burden ... which is a nonsensical waste of scarce resources,” the letter reads.
Mr Gilhooly said purchasers had not budgeted for – and in some cases are not in a position to pay – the 6pc stamp duty upfront.
The Law Society – the representative body for solicitors – is concerned that lending institutions may withdraw funding from purchasers because of the difficulties, Mr Gilhooly said.
Meanwhile, Mr Donohoe has faced criticism over the scope of the stamp duty hike. In his Budget speech he said he was “increasing the level of stamp duty on commercial property transactions” – but the Revenue treats commercial property as part of a broader category of “non-residential property”.
This means farms and business assets, including book debts, are included in the hike, Mr Donohoe explained to the Dáil last week.