Stamp Duty Explained

Stamp Duty is the tax levied by the Government for changing the documents that specify who owns a particular property irrespective of whether it’s a new build or second-hand property.  It’s thought to have originated in Spain and goes back to the days when a physical stamp (a revenue stamp) had to be attached to a document to show that duty had been paid.

The amount is based on the type and cost of the property and whether it is a residential or non-residential property.

For residential property, it is calculated at 1% of the selling price of any property up to €1m. For amounts above €1m you will be charged 2%.

For example:

If you buy a home that is worth €300,000, you will pay stamp duty of €3,000.

It is worth noting that stamp duty is not part of your mortgage and needs to be saved separately to what you have for your deposit.

VAT is charged on new build homes but not on second-hand homes.

If you are buying a new build, then you will only pay Stamp Duty on the base price. Not the price including VAT.

For example:

If you paid €227,000 (including VAT) for your new house, this is made up of the base price of €200,000 plus 13.5% VAT (€27,000).

In this case you only pay stamp duty on the base price of €200,000, so your Stamp Duty will be €2,000.

When closing a sale your solicitor will calculate the stamp duty you owe to the Revenue Commissioners.

A single rate of 2% applies to all non-residential property.

If you buy a site with an arrangement to build a house on it, then stamp duty will be charged at the residential rate on the total of the site and the building cost.

If you buy a site with no connected arrangement to build a house or apartment on it, then stamp duty will be charged on the site cost at the non-residential property rate.

For more information check out the Revenue Commissioners page on Stamp Duty.