Tax and Legal

Repayment of stamp duty where certain residential properties leased as social housing (Section 83E SDCA 1999)

Sasha Kerins
By:
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On 19 May 2021 and following a much publicised controversy surrounding “bulk” sales of housing stock to institutional investors, the Irish government passed a financial resolution introducing a new stamp duty rate of 10% targeted at the “bulk buying” of certain residential units.
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Although not included in the May 2021 financial resolution, the Finance (Covid-19 and Miscellaneous Provisions) Act 2021 signed into law by President Higgins on 19 July 2021 which enacted these stamp duty changes also provided for a mechanism to allow for a refund of up to 9% of the stamp duty incurred on the “bulk buying” of houses where they are subsequently let to a local authority or an approved housing body for a term not less than 10 years.

On 22 April 2022, Revenue released its Tax and Duty Manual (‘TDM’) on this refund scheme (“Section 83E: Repayment of stamp duty where certain residential units leased (social housing)”) which provides further detail on how it will operate. We have set out below some of the key practical takeaways which will be important for all relevant taxpayers operating in this space.

Key practical takeaways

  • Only new leases entered into post acquisition will qualify as a “qualifying lease” for the purposes of claiming a refund under this scheme. Where units are acquired with pre-existing leases with a local authority or an approved housing body then there is no entitlement to a refund.
  • The refund can be claimed as soon as the qualifying lease is executed.
  • Where only some units which were acquired under an instrument with which the 10% stamp duty was paid, then the amount of the refund entitlement should be apportioned to reflect the amount of units actually subject to a “qualifying lease”.
  • The refund under this section also applies to indirect acquisitions of residential property i.e. share acquisitions.
  • Revenue is developing an e-repayment system for this refund and this TDM will be updated to reflect the process once done. However, in the interim, all enquires / claims should be made by contacting the stamp duty office directly via relevant online channels.
  • There is a refund clawback mechanism where the units are not leased for at least 10 years.

Under this section of the legislation, Revenue have the right to request whatever information they deem necessary on the relevant lease arrangements from the Department of Housing as part of their compliance checking procedures.

Get in touch

For additional information on any of the foregoing provisions please contact a member of the Real Estate Tax Advisory team or your usual Grant Thornton contact.