Auctioneers call for slashing of ‘crippling’ rate of stamp duty on land
The current rate of stamp duty of 7.5% on commercial property transactions and land sales is crippling the sale of small commercial premises and farmland in rural Ireland, according to the Institute of Professional Auctioneers and Valuers (IPAV).
In a pre-budget submission to the government, the organisation is calling for a new tiered system of stamp duty to be introduced.
Sales of such properties with a value of €500,000 or less would see a slashing of the rate to 1%, in line with the residential stamp duty rate.
Pat Davitt, chief executive of IPAV, said the 7.5% rate is having a detrimental impact on land sales and that of small commercial properties.
“It adds €7,500 to every €100,000 and is proving a real disincentive. The tiered system which we’re proposing to government is essential to create movement in this market,” he said.
The IPAV submission also calls for the Help-To-Buy (HTB) scheme to be extended to include second-hand homes.
The scheme currently applies to first-time buyers of newly-built homes to buy a new house or apartment. It also applies to once-off self-build homes. It provides a refund of income tax and Deposit Interest Retention Tax (DIRT) paid in over the previous four tax years.
There is a good supply of properties for prices much lower than that of new homes, typically at prices of between €170,000 and €250,000 – especially in rural areas.
“Such an initiative would have the positive consequence of freeing up properties in the cities for rent or for sale,” Davitt said.
He said new homes, even in rural Ireland, priced between €250,000 and €300,000, are already too expensive for young people on an average wage from €40,000 to €50,000