Persons who paid stamp duty at the increased commercial property rate of 6% introduced in October 2017, may shortly be able to make an application for a partial refund of the stamp duty paid. The refund scheme itself is provided for in the Finance Act 2017. Revenue eBrief No. 092/18, published on the Revenue website on 17 May 2018, now provides access to guidance on Revenue’s interpretation of the scheme and to its implementation in practice.
As a brief recap on the main conditions to the scheme, the refund entitlement is the difference between the stamp duty charged, calculated at the rates of 6% and the previously applicable 2% but applies subject to the very strict conditions set down in the legislation. The refund application can be made once “construction works” have commenced but, crucially, the works must have commenced within the period of 30 months starting on the day after the completion of the purchase of the land and the latest date for the commencement of works for the purposes of the refund scheme is 31 December 2021. To apply for a refund however, persons must also be satisfied that the development will meet the density requirements set down in the legislation. For multi-unit developments this involves meeting one of two “75% tests” designed to accommodate both low rise and high rise development, while different considerations apply to single unit developments. Also crucially, and to avoid a clawback of any refund, once claimed, a development must be completed within 2 years of a local authority acknowledging commencement of the development.
The Revenue guidance clarifies as to what does and does not constitute the commencement of “construction works” triggering eligibility for the scheme. Having planning permission in place will not be enough on its own to ground eligibility. Actual physical works in the nature of those described in the Revenue guidance will need to have been undertaken. Revenue also provide helpful guidance on when a development is considered complete and how the scheme operates for phased developments.
A further update will issue from Revenue once the IT systems are in place to facilitate on-line applications.
You may access the e-Brief here.