stamp duty on homes above €1.5m to 6% ???

1% up to €1m
2% on amounts from €1m to €1.5m
6% on amount over €1.5m

Effectively immediately.

On the full amount, or the excess?

6%? Isn't that an insane amount? Given regular house price inflation over the next few years, buying a normal house in SoCo Dublin will have at least a 90k bill associated with it. (If it's on the full amount)

Only applies to the excess over €1.5m. So a €2m house will cost €50k stamped duty.

Suprised to see this. And very little fanfare or warning.

Struggling to see the economic merits to this. Unlikely to be a big revenue generator but may further reduce liquidity in the downsizer market which is already far too low. Anyone any ideas what they’re getting at with this one?

Seems harsh that it’s immediate. What if you’re already maxed-out with the bank or in terms of your spare cash?

Gordon Gekko said:

Seems harsh that it’s immediate. What if you’re already maxed-out with the bank or in terms of your spare cash?

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Something about ‘transitional arrangements for transactions in progress’

Might have to be contracts signed though?

Zion2022 said:

Something about ‘transitional arrangements for transactions in progress’

Might have to be contracts signed though?

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Fair enough, thanks.

It's on the excess - I was reading the Dept of Finance figures, the increase in inheritance tax bands will cost an estimated €88m and the 6% stamp duty is estimated to bring in €80m. The left hand giveth

RMGC11 said:

6%? Isn't that an insane amount? Given regular house price inflation over the next few years, buying a normal house in SoCo Dublin will have at least a 90k bill associated with it. (If it's on the full amount)

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I think there are plenty of 'normal' houses in South Dublin and elsewhere for less than €1.5 million...

I don't really see the point of it?

Transaction taxes discourage activity and, in this case at least, it doesn't raise a material amount of money.

I wouldn't have a problem with it if it were just one element of an austerity budget.

Brendan

edit upated figures

Zion2022 said:

but may further reduce liquidity in the downsizer market

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We have been thinking of downsizing our home but wish to remain in the same area. With the 6% stamp duty it may cause problems for us when we try to sell. We would only be taking a one step down downsize from a 5 bed to a large 3 bed, so the 2% stamp duty would be costly. Thoughts in my head......why bother.

It's criminal for anyone going through the process of waiting on new-builds to be finished etc if effectively immediately. This was me for most of this year and last waiting on a massively delayed new house, and something like this coming in overnight would have finished me, on top of paying exorbitant rent etc because of major delays out of anyone's control.
But I suppose it's a nice populist, stick-it-to-the-rich move.Though as someone says above, the way house prices are going, it's hardly even that and will surely have the oh-so-clever impact of reducing supply even further. Well done lads.

Odea said:

We have been thinking of downsizing our home but wish to remain in the same area. With the 6% stamp duty it may cause problems for us when we try to sell. We would only be taking a one step down downsize from a 5 bed to a large 3 bed, so the 2% stamp duty would be costly. Thoughts in my head......why bother.

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Stamp duty has always been a tax on the seller but paid by the buyer in the transaction as the buyer deducts it from the purchase price they would have paid. A buyer will buy a house up to the level they can afford/ finance.

Back in the 2000's, it was 7.5% up to 635k and then 9% if price above, and it was all at 9%, so a house for 636k you would have paid 57k stamp duty, that was a penalty rate, 1% up to 1m and 2% between 1-1.5m is not that bad,

There is one thing that the Irish government excels at (regardless of which party/parties) - its constant tinkering with housing policy has created a mess and a lot of resentment. We shouldn't lose site that despite stamp duty being slashed in December 2010 from as much as 9%, many people paid huge amounts of stamp duty leading in the years leading up to that date. Seems that stamp duty was just thrown into consolidated revenue and blown on non-housing issues. Then came along a local property tax (circa July 2013?) charged on the market value of the residential property which someone recently paid a ton of stamp duty (property tax) to acquire. The government did not offer those people any discount/rebate when the LPT was introduced. Those folk got screwed twice. Now when they go to sell they might again be negatively impacted by a change in stamp duty (buyers needing more cash to cover the increase in stamp duty). Some may same that this move only affects the rich / mansion dwellers - but that is far from the actual truth. Regardless, we may well end up seeing people with homes over €1.5mn in 'in-demand' locations reluctant to put their home on the market, which does nothing for supply.

We will all have different views here no doubt, but surely the one thing in common is that when it comes to the Irish government, it has never achieved a thoughtful housing policy over the decades and the ones it comes up with are poorly executed.