The Finance (COVID 19 and Miscellaneous Provisions) Act 2021 was enacted on 19 July 2021 giving statutory effect to the 19 May 2021 Financial Resolution which imposed a new stamp duty rate of 10% on the acquisition of certain types of residential units by investors. Introduced as a new Section 31E of the Stamp Duties Consolidation Act 1999, the provision was one of a series of measures introduced by the Irish government to dis-incentivise the bulk buying of residential houses and duplexes in favour of improving the availability for purchase for owner occupiers and the social housing sector (see our previous advisory here).
In addition to an exemption from the 10% stamp duty rate in respect of purchases of houses under the government's Mortgage to Rent Scheme, the Act also includes provision for the repayment of stamp duty where properties are leased to a housing authority or an approved housing body for social housing purposes. The Minister for Finance noted that he was proposing the amendment to safeguard certain leases currently in progress that may not go ahead otherwise and in the wider context of the policy to increase the supply of social housing.
The repayment provision permits a refund of the 10% stamp duty paid in circumstances where the purchaser executes a "qualifying lease" with a housing authority or approved housing body within two years of acquiring the residential unit. A "qualifying lease" for these purposes must be for a term of not less than 10 years. A clawback applies if the qualifying lease is subsequently terminated before the expiry of 10 years. Where a lease is subsequently terminated, the refunded amount becomes repayable to Revenue. Where applicable, the repayment provision should permit a refund of stamp duty back to the stamp duty that would otherwise have been chargeable on the acquisition of the relevant residential property (i.e. 1% stamp duty up to a purchase price of €1,000,000, and 2% on the balance).
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