Section 83D of the Stamp Duties Consolidation Act 1999 as inserted by Section 61 of the Finance Act 2017
Repayment of Stamp Duty where land used for Residential Development
The Finance Act 2017 introduced a mechanism for repayment of stamp duty paid on land where that land is subsequently used for residential development, such that if the maximum amount of stamp duty is repaid under the mechanism, the effective rate of stamp duty ultimately payable would be 2%.
Repayment of Stamp Duty – criteria
Stamp Duty paid on instruments executed on or after 11 October 2017 that relate to the transfer of non-residential property and on which 6% stamp duty liability was paid, may be repaid by the Revenue Commissioners up to a maximum of two-thirds of such stamp duty paid, if construction operations of one or more dwelling units on the land commence on or before 31 December 2021 and pursuant to a commencement notice within the period of 30 months following the date of execution of the deed.
The section contains clawback provisions and any repayment of stamp duty will be clawed back if:
- the residential development is not completed within the period of 2 years of issuance by the relevant building control authority of their acknowledgment of the commencement notice; or
- when the development is completed: (i) at least 75% of the total surface area of the land is not occupied by dwelling units; or (ii) the gross floor space of dwelling units on such land does not amount to at least 75% of the total surface area of that land.
The amount to be repaid is determined by the formula A x B x 2/3 where:
A = the amount of stamp duty paid (at the rate of 6%); and
B = the proportion of the area of the land on which residential development occurred,
expressed as a fraction.
Documentary evidence in relation to repayment of stamp duty
To satisfy themselves that either the conditions for the making of a repayment, or the conditions for the avoidance of a claw-back, are satisfied, the Revenue Commissioners may specify documents and particulars be submitted, to include the following:
- copy of any commencement notice
- copy of any acknowledgment sent by the Building Control Authority
- copy of any planning permission granted
- the number and gross floor space of dwelling units constructed
- the area of the land expressed in hectares.
All relevant documentation should be retained by the claimant for six years, as same may be requested by Revenue to evidence the legitimacy of any such claim.
Making a Repayment Claim
Once construction operations have commenced pursuant to a commencement notice acknowledged by the Building Control Authority, a claim for a repayment can be made by an accountable person by electronic means (in a form and manner yet to be specified by Revenue) and should include a statutory declaration stating that construction operations of one or more dwelling units on the land commenced pursuant to a commencement notice within the period of 30 months following the date of execution of the deed, and (where a claim relates to a part of the stamp duty paid) the proportion of the area of the land represented thereby. Note that a repayment does not carry interest (although interest shall be repayable on a clawback) and cannot be made after the expiry of 4 years following the date of acknowledgment by a Building Control Authority (notwithstanding the development might be carried out in phases).
If Revenue refuses the repayment they shall notify the claimant in writing of the decision and the reasons for it, who may appeal to the Appeal Commissioners within 30 days of receipt of any such notice.
Single-unit developments and multi-phased developments
While the above relates to multi-unit single phased developments, Section 83D of the Stamp Duties Consolidation Act 1999
also applies to single-unit developments and multi-phased developments with the conditions set out above modified accordingly.
Author: Vicky Pigot
12 April 2018