New stamp duty reliefs for residential property took effect on 1 June 2023

Investors in residential property will be interested in changes to stamp duty reliefs, which took effect on 1 June 2023. The reliefs apply where stamp duty is paid at the applicable rate on the purchase of the property and that property is then made available within a short time-frame for social or affordable purposes in specific ways.

Refund of the 1%, 2% or 10% residential rate paid on the purchase of residential property

The relief provided for under s83DA of the Stamp Duties Consolidation Act 1999 (“SDCA 1999”) operates as a refund of the relevant residential rate (of 1%, 2% or 10%) that applied to the purchase of the property, where, within 12 months of the purchase, the property is sold on by the original purchaser to an affordable housing applicant nominated by the local authority by way of a direct sales agreement in accordance with the Affordable Housing Act 2021.

This relief, by way of refund of stamp duty for the original purchaser, is subject to a time limit of four years, starting on the date on which the original purchaser sells the property concerned to the affordable housing applicant.

Expanded rebate from the 10% residential rate paid on the purchase of residential property

This relief, provided for under s83DB SDCA 1999, operates as a partial refund of stamp duty paid on the purchase of residential property at the higher 10% residential rate provided for under 31E of SDCA 1999, where the property is further dealt with in any of the following ways and certain further conditions are met:

1. within 24 months of acquisition, the property is let to a housing authority or an approved housing body for social housing purposes for not less than 10 years, or
2. within 6 months of acquisition, the property is designated as a cost rental dwelling under the Affordable Housing Act 2021, or
3. within 18 months of acquisition, the property is registered as a designated centre under the Health Act 2007, providing nursing home or certain other specific types of residential care for dependent persons, or
4. within 18 months of acquisition, the property is registered as a children’s residential centre under the Child Care Act 1991, providing homes for children in care.

Relief may be claimed for the amount of stamp duty paid on an instrument executed on or after 20 May 2021 in excess of the amount that would have been payable had the higher 10% rate not applied. This is subject to a time limit of four years, starting on the date the relevant conditions are met. 

Existing rebate from stamp duty paid at the 7.5% non-residential rate on the acquisition of development land

These reliefs are in addition to the existing relief from stamp duty paid at the 7.5% non-residential rate on the acquisition of development land under s83D SDCA 1999 (as subsequently amended and extended) where various conditions are met in relation to the development of residential units on the land.

It will be important to consider all of the qualifying conditions and the procedures for claiming each relief, but the reliefs should provide welcome cost savings for investors and developers involved in the delivery of housing.