07/08/2020 by McKenna and Co Solicitors
Buying and selling property in Ireland: what taxes are you liable for?
What are they and will you have to pay them?
1. NPPR, Non-Principal Private Residence
Set up in 2009, to generate more funds during the Recession, the NPPR lasted until 2013 and taxed people who owned more than one property.
The property either has a Certificate of Discharge, which acknowledges that the NPPR has been paid, or a Certificate of Exemption, which says the property was exempt from the NPPR as it was the occupant’s primary residence.
This applies to new builds, second hand dwellings and apartments. The NPPR tax is retroactive.
2. LPT, Local Property Tax
The LPT has been in effect since 2013 and is paid annually. The LPT applies to anyone who owns a property, whether that be a second-hand home or an apartment. For those with new builds, the LPT won’t have to be paid until November of the following year.
On purchasing either a second-hand dwelling or an apartment the LPT will be apportioned so that the vendor (person selling) pays the full amount for the year and the purchaser will repay what they owe from the date they move in.
For example, Mary buys a house from John and the transaction closes on 20th June. John will pay the full LPT for the year. The amount, which ranges depending on the property value, will be divided so that Mary pays from 20th June
onwards and John pays for the time preceding that.
3. Service Charge
A service charge is a charge payable on either apartments or new builds with a common area. The charge will pay for things like cleaning and maintenance of the area and general upkeep. It is paid once a year to a management company.
4. Stamp Duty
Stamp Duty is payable on every house in Ireland to the Revenue. On second-hand buildings and apartments, the stamp duty is 1% of the purchase price.
For new builds, it is slightly less than 1% as there is no VAT on the stamp duty for a new build.