Since 2017 the Irish Government has a stamp duty refund scheme which enables those who purchase land to develop residential property. The Act provides that when stamp duty, at the new higher rate of 7.5%, is paid on the acquisition of land, which is subsequently used to build residential property, the purchaser will be entitled to a tax refund of up to 6% of the duty paid.
It is important to keep in mind that the refund of stamp duty is only applicable in relation to the proportion of the land used for residential development. The scheme only applies where the residential development begins within thirty months of the date the land was acquired but before 1st January 2022. The scheme does not apply to the refurbishment or completion of existing or partially constructed units. 75% of the land, for which the refund claim is made, must comprise of dwelling units.
To ensure you are eligible for this it is important to ensure that the development must commence on foot of a Commencement Notice served in compliance with the Building Control Regulations and must be completed within two years of the relevant Local Authority’s acknowledgement of the Commencement Notice. There is also a four-year time limit on claiming a repayment. The duty refund can be claimed once you commence the development works.
If your social housing development is being carried out in phases, your repayments must also be sought on a phased basis. The phased repayments will be relative to the proportion of the land used at each phase of the development.
Social Housing Co. can calculate how much stamp duty is due and request this from you before the sale is closed. The amount is paid to the Revenue Commissioners, who place a stamp on the property deeds. Without this stamp, the deeds cannot be registered.