PASCHAL DONOHOE BEGAN his first Budget as Finance and Public Expenditure Minister by saying the announcement would “build on progress that would have seemed impossible only a few short years ago”.
Earlier on today the Taoiseach promised to put money back in the pockets of “taxpayers, working people, families, pensioners, people on welfare” and to bring in “measures to reduce the cost of living”.
But just how does this year’s Budget, delivered this afternoon, affect you?
For more information Irish revenue have published a leaflet, which you see here – http://www.revenue.ie/en/corporate/press-office/budget-information/2018//index.aspx
The main points for property transactions, property and gifts/inheritances are :-
#Residential Property rate = no change on rates of 1% up to €1m and 2% above that.
#Non-residential property rate = Since 14 October 2008 the stamp duty rate applicable to transfers of non-residential property reduced on a sliding scale from 9% to 2% with the aim of buoying the then very stagnant property market. Having achieved its objective the rate is now increasing from its current 2% to 6% for
transfers of non-residential property on or after 11 October 2017.
#Stamp duty refund scheme = Commercial land purchased for the development of housing will be eligible for a stamp duty refund. The refund will be subject to certain conditions, including a requirement that the ‘relevant
development’ is commenced within 30 months of the land acquisition.
#Consanguinity relief = The 1% rate applicable to transfers of farm land between related persons has been maintained.
#Young trained farmers = The exemption from stamp duty on transfers of agricultural land to a young trained farmer has also been maintained.
Capital Gains Tax (CGT)
#Seven year exemption
An exemption from Capital Gains Tax (CGT) was introduced in Finance Act 2012 which
provided an exemption from CGT on the disposal of residential and commercial property
purchased between 7 December 2011 and 31 December 2014, and held for seven years.
In order to free up stockpiled land banks of undeveloped property, the holding period has been
reduced from seven years to four years with immediate effect.
In order to encourage owners of vacant residential property to develop their property and bring
it into the rental market, a measure has been introduced for the tax deduction of pre-letting
expenses where that property remains in the rental market for a period of at least four years.
#Vacant site levy
Since 1 January 2017 local authorities have been tasked with the establishment and maintenance
of a register of vacant sites zoned for residential or regeneration purposes, which measure in
excess of 0.05 hectares. An identified vacant site can be entered on the register when the authority
is of the opinion that it has been vacant for a minimum of 12 months preceding its entry on the
From 1 January 2018 properties entered on the register are subject to an annual 3% levy on the
market value of the site, which is payable in arrears at the beginning of 2019.
The vacant site levy has now more than doubled for second and subsequent years, rising from the
current 3% rate that applies in the first year to 7% each year thereafter.
This measure will mean that any owner of a vacant site on the register who does not develop their
property in 2018 will pay the 3% levy in 2019. If they continue to retain their vacant land then
they become liable to the increased rate of 7% in 2020 meaning an effective total levy of 10% over
a two year period.
Capital Acquisitions Tax (CAT)
For the purpose of CAT and CGT, the leasing of agricultural land for solar infrastructure is
classified as agricultural land and thereby eligible to qualify for relief under both agricultural relief
and retirement relief. A condition has been imposed restricting the amount of the farmland that
can be used for solar infrastructure to 50% of the total farm acreage.
The Irish Times has published an interesting article on the consequences of the financial changes. Take a look at it here = https://www.irishtimes.com/business/economy/budget-2018-main-points-everything-you-need-to-know-1.3250539