We have clarified with Revenue that the Stamp Duty Refund scheme for residential development land can apply to existing commercial buildings.
One of the requirements for the refund to apply is (as set out in section 61 (2) (b) of the Finance Act 2017) that “the property so conveyed or transferred was land”.
“Land” is defined in the Interpretation Act 2005 to include houses and buildings.
Where a commercial building is bought, stamp duty at the 6% rate applies. However if construction operations to create dwelling units commences, a refund may be sought under section 61 of the Finance Act 2017, where the conditions contained in that section are satisfied.
A discussion of the conditions of the scheme is contained in our previous blog – Stamp Duty Refund Scheme: Development Land. Some conditions must be met to apply for the refund and others must be met to avoid a subsequent clawback of the refund.
This view is supported by paragraph 3 of section 14.1 and paragraph 2 of section 14.2.2 of the Revenue Operational Manual (which has just been updated) which respectively state that:
Paragraph 3 of section 14: “References to Land includes greenfield sites as well as land occupied by non-residential buildings such as office blocks and other commercial buildings”
Paragraph 2 of section 14.2.2: “Where existing non-residential buildings are being converted for residential use, Revenue is also prepared to treat internal adaptation work as construction operations”.
This measure will incentivise the conversion of existing commercial buildings to residential use, whether for multiple dwelling units or for a large single residence.