WHAT STAMP DUTY DO I PAY ON A SITE?
Because a site is non-residential property, stamp duty is charged on a transfer of a site at a rate of 7.5% of the value.*
However, if you buy a site with a connected agreement to build residential property on it, the site is deemed to be residential property and stamp duty is charged at a rate of 1% of the consideration paid for the site plus the consideration paid for the construction works (exclusive of VAT).
The agreement to buy the site and the building agreement must be connected. In other words, the transfer of the site must be conditional upon you entering into the agreement for the construction of a residential house or apartment.
*See also details below on the Stamp Duty Refund Scheme
The agreement to buy the site and the building agreement must be connected. In other words, the transfer of the site must be conditional upon you entering into the agreement for the construction of a residential house or apartment.
*See also details below on the Stamp Duty Refund Scheme
Example of calculation of stamp duty on the purchase of a site with a combined building contract
Mary contracts to buy a site from Builder & Co, developer, for €30,000.
A building agreement is also entered into with Builder & Co, whereby Builder & Co undertake to build a house on the site for Mary for €150,000.
Builder & Co would not have sold the site to Mary if she had not also entered into the building agreement. A conveyance giving effect to the purchase of the site is executed. Though the conveyance recited a consideration of €30,000, the stampable consideration is €180,000. As the property is residential property the duty applicable is €1,800 (€180,000 x 1%).
Even if the building works had not been completed (or even commenced) at the date of the conveyance the stamp duty position would be the same i.e. the stampable consideration would be €180,000.
This provision does not apply to purchases of sites where it can be shown that no connection or arrangement exists between the sale of the site and the building of a house or apartment on that site e.g. where a person buys a site - or receives it as a gift from a parent - and employs a builder unconnected with the sale of the site.
A building agreement is also entered into with Builder & Co, whereby Builder & Co undertake to build a house on the site for Mary for €150,000.
Builder & Co would not have sold the site to Mary if she had not also entered into the building agreement. A conveyance giving effect to the purchase of the site is executed. Though the conveyance recited a consideration of €30,000, the stampable consideration is €180,000. As the property is residential property the duty applicable is €1,800 (€180,000 x 1%).
Even if the building works had not been completed (or even commenced) at the date of the conveyance the stamp duty position would be the same i.e. the stampable consideration would be €180,000.
This provision does not apply to purchases of sites where it can be shown that no connection or arrangement exists between the sale of the site and the building of a house or apartment on that site e.g. where a person buys a site - or receives it as a gift from a parent - and employs a builder unconnected with the sale of the site.
The stamp duty refund scheme
As set out above, the rate of stamp duty on non-residential property, which includes a building site or land (where a transfer takes place without a connected building agreement), is 7.5%.
However, the Finance Act 2017 introduced a stamp duty refund scheme. Under the scheme a transferee may qualify for a refund of two-thirds of the Stamp Duty subject to certain conditions, which include:
The claim should be made after the commencement of the building work.
Clawback applies if the building work is not completed within the specified period and in certain other circumstances.
However, the Finance Act 2017 introduced a stamp duty refund scheme. Under the scheme a transferee may qualify for a refund of two-thirds of the Stamp Duty subject to certain conditions, which include:
- The deed transferring land must have been executed on or after 11 October 2017.
- The stamp duty must have been paid in full and the appropriate stamp duty certificate issued
- The transferee must develop the required portion of the land for residential purposes and commence building a house(s) or apartment(s) on the land within 30 months after the date of the transfer.
- In the case of a single dwelling unit, you cannot claim a refund for curtilage which exceeds 0.4047 hectares (1 acre)
The claim should be made after the commencement of the building work.
Clawback applies if the building work is not completed within the specified period and in certain other circumstances.
