The Government must reconsider fundamental change on inadequate notice
The Irish Government has again increased the rate of stamp duty payable in commercial property transactions. As of the 9th October 2019, the rate of stamp duty payable on the purchase a commercial property incresaes to 7.5%. Prior to the 9th October the rate was 6% of the purchase price. The prior rate of 6% stamp duty will still apply during a transitionary period which will last until the 1st January 2020. Binding contracts must have been exchanged prior to the implementation of the change i.e. midnight on the 9th October for the transitionary measures to apply and the rate of 6% stamp duty to be available to these purchasers.
Section 83D refunds
Where non-residential land is purchased for residential development and Stamp Duty is paid at the new 7.5% rate, a refund of up to 11/15ths of the Stamp Duty paid may be available where certain qualifying conditions are met.
Once again, to the frustration of many involved in the property business, the Government has shown a high level of disregard to the budgetary and financial planning elements and the complextities of modern commercial transactions by seeking to impose a 1.5% increase on stamp duty effective as of midnight on the date of announcement. The transitionary arrangements do not address the issue as the measures anticipate that parties to large scale transactions for often complex properties that require due investigation of planning and title will merely forego such investigations and conclude contracts in a four to eight hour window. This does not bear any connection to the realities of commercial conveyancing and the Government is urged to cease the unilateral practice of arbitrary increases in taxes that have a significant commercial bearing with inadequate notice to all stakeholders involved.