Sunday Independent (Ireland) - Business & Appointments - - FRONT PAGE -

who were first-time buy­ers in 2007 (from the end of March of that year) paid no stamp duty on the prop­erty pur­chase. Af­ter the crash in 2007/8, many of these buy­ers were left with no choice but to rent the prop­erty be­cause of loss of em­ploy­ment, salary re­duc­tions and so on. Some had to down­size, some to move back to the fam­ily home, some to em­i­grate. If this hap­pened within five years of the pur­chase, a po­ten­tial li­a­bil­ity to stamp duty may have been in­ad­ver­tently and un­know­ingly cre­ated. It is likely that most peo­ple in this po­si­tion still are not aware of this. What at­ti­tude is the Rev­enue Com­mis­sion­ers tak­ing to this prob­lem and what should any­one af­fected by this do to get clar­i­fi­ca­tion? Tom, Naas, Co Kil­dare THE Rev­enue Com­mis­sion­ers have not is­sued any guid­ance on this mat­ter nor given any in­di­ca­tion that they are ap­ply­ing any con­ces­sion­ary treat­ment. The leg­is­la­tion drafted at that time re­mains in place and where a claw­back arises, the stamp duty is payable. In­ter­est and penal­ties also arise from the date on which the stamp duty should have been re­paid.

The stamp-duty regime in place at the time was quite com­plex and has since un­der­gone fur­ther changes. Where re­lief from stamp duty was claimed, it is there­fore im­por­tant to re­view the cir­cum­stances of each par­tic­u­lar case in or­der to es­tab­lish if any claw­back arises.

The first-time buyer ex­emp­tion ap­plied to pur­chases of res­i­den­tial prop­er­ties made by first-time buy­ers be­tween March 31, 2007 and De­cem­ber 8, 2010. The re­lief ap­plied to pur­chases of res­i­den­tial prop­erty by first-time buy­ers for use as their main res­i­dence.

Orig­i­nally, the re­lief was sub­ject to a claw­back where rental in­come was sub­se­quently de­rived from the prop­erty within five years of its ac­qui­si­tion. This was sub­se­quently amended so that the claw­back pe­riod was re­duced to two years where the prop­erty was rented for the first time af­ter De­cem­ber 5, 2007. In ret­ro­spect, and in light of the im­pact of the eco­nomic crash in or around that time, this was a sig­nif­i­cant amend­ment and most likely greatly re­duced the num­ber of trans­ac­tions that would have given rise to a claw­back.

While the eco­nomic crash led to a change in cir­cum­stances for many of these first-time buy­ers, the claw­back only arose in spe­cific cases. One no­table ex­cep­tion is where the rental in­come de­rived qual­i­fied for ‘rent-a-room re­lief ’ — where the home­owner rented out a room or rooms in the prop­erty while con­tin­u­ing to re­side there them­selves and the to­tal rent re­ceiv­able was less than €10,000 per an­num at that time. The claw­back does not ap­ply in such cases.

Ceas­ing to use the prop­erty as their res­i­dence did not in it­self give rise to a claw­back for home­own­ers ei­ther, pro­vided no rental in­come was de­rived from it. Also where the prop­erty was sold, this in it­self does not give rise to a claw­back — even when the sale took place be­fore the end of the claw­back pe­riod.

How­ever, it should be noted that where a claw­back arose the en­tire stamp duty was re­payable — re­gard­less of the pe­riod of time that had elapsed be­fore the claw­back event oc­curred.

At the time the first-time buy­ers ex­emp­tion re­ferred to above was in­tro­duced, there was al­ready a sep­a­rate re­lief in place for a num­ber of years for newly built prop­er­ties. This re­lief also con­tin­ued to ap­ply un­til De­cem­ber 8, 2010. Broadly, this re­lief ex­empted most newly-built res­i­den­tial prop­er­ties from stamp duty where they were ac­quired for use as the pur­chaser’s main res­i­dence.

As with the first-time buy­ers ex­emp­tion, a claw­back of the re­lief ap­plied where rental in­come was de­rived from the prop­erty. Sim­i­lar con­sid­er­a­tions there­fore ap­ply to cases where this re­lief was claimed as ap­ply to the cases above. While we will en­deav­our to place your ques­tions with the most ap­pro­pri­ate ex­pert for your query, this col­umn is not in­tended to re­place pro­fes­sional ad­vice.

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