Dáil Éireann - Volume 550 - 20 March, 2002

Written Answers. - Tax Code.

Mr. Gilmore Mr. Gilmore

  309. Mr. Gilmore asked the Minister for Finance if tenants of private rented accommodation are liable for the payment of stamp duty when the rent exceeds €19,000 per annum; the history of this tax on tenants; his plans to abolish the tax; the number of tenants who are liable for this tax; the revenue from the tax in 2001; and if he will make a statement on the matter. [9104/02]

Mr. McCreevy Mr. McCreevy

1206

  Minister for Finance (Mr. McCreevy): A lease of any dwelling house, part of a dwelling house, or apartment, for an indefinite term or for a term not exceeding 35 years, is exempt from stamp duty where the average annual rent does not exceed €19,050. Where the annual rent exceeds €19,050, the amount is liable to stamp duty at a rate of 1%. Leases of residential property where the term of the lease is between 35 and 100 years, or where the term of the lease is in excess of 100 [1206] years, are also liable for rates of 6% and 12% respectively, with the duty being charged on the average annual rent. I am advised, however, that instances of these higher rates of duty applying to residential property are rare. I should also point out that if a tenant is required to pay a lease premium under the terms of a lease, the premium amount is also liable to stamp duty at the same rates as those that apply to conveyances of residential property.

  As regards the history of the charge of stamp duty on leases of residential property, the charge has been a feature of the stamp duty code since the basic legal principles of tax were developed during the 19th century. An exemption from the charge where the annual rent did not exceed €7,618, £6,000, was introduced by the 1989 Finance Act. This figure was increased to €19,050, £15,000 by the 2000 Finance Act and applies to leases executed on or after 1 December 1999.

  It is not possible to provide a breakdown of the number of tenants who are liable for the tax nor is it possible to provide details of the year 2001 from this category of stamp duty. I am advised that the reason for this is that the relevant yield figures include the stamp duty collected from both leases of commercial property as well as from leases of residential property.

  Changing stamp duty rates is always a balancing act since one has to have regard to the various participants in the market as well as to their needs while placing them in the context of the broad economic effect.

  While the rates and thresholds are reviewed on an ongoing basis, I have no plans to change the threshold in relation to stamp duty in respect of leases, but will continue to have the position monitored.

Dáil Éireann 550 Written Answers. Tax Code.

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