The Finance (COVID 19 and Miscellaneous Provisions) Bill 2021 (the Bill) which was published by the Government on 22 June 2021 passed through the Final Stage of the Dail yesterday evening.

The Bill gives statutory effect to the Financial Resolution passed on 19 May 2021 imposing a new stamp duty rate of 10% on the acquisition of certain types of residential units by investors (the Financial Resolution).

The Financial Resolution was initially introduced by the Government with the stated intention of disincentivising the purchase of multiple residential units by a single corporate entity or individual due to concerns about the impact of such purchases on the availability of housing for owner occupiers and the social housing sector. The Bill has introduced a number of key changes to the Financial Resolution in respect of the application of the 10% stamp duty increase which are outlined below.

Headline Amendments to the Stamp Duty provisions

The Bill was available for inspection from 22 June 2021, however, the Minister for Finance introduced an amendment to the Bill on 6 July 2021 at Committee Stage to facilitate a clawback of the increased stamp duty charge in circumstances where houses are bought by investors for leasing to local authorities. In other words, any investor acquiring multiple properties for the purposes of granting a lease to a local authority for social housing purposes will not be subject to the increased stamp duty rate of 10%. This amendment was in addition to the initial draft of the Bill which included an exemption to the increased stamp duty rate for investors who lease residential units to local authorities under the Mortgage to Rent Scheme.

The latest amendment proposed on the 6 July 2021 was the subject of much debate in the Dail yesterday evening, but was ultimately passed and incorporated into the Bill.

Key Changes to the Financial Resolution

The Bill contains key changes to the Financial Resolution, which are as follows:

  • Investors who lease residential units to local authorities under the Mortgage to Rent Scheme are to be exempt from the imposition of increased rate of stamp duty. Under the Mortgage to Rent scheme, properties are surrendered to the financial institution holding the mortgage and are sold to a private company in tandem with an agreement to then lease the property to a local authority who in turn leases it to the existing occupants so that they can continue to live in the property
  • Investors who lease residential units to local authorities or approved housing bodies for social housing purposes shall be able to clawback the difference between the stamp duty that would have been paid at the standard rate and the stamp duty paid at the 10% rate
  • As per the Financial Resolution, units purchased before the Financial Resolution came into effect on 20 May 2021 counted towards triggering the threshold of 10, but the 10% rate was only to apply to units bought after the 20 May 2021. The Bill now specifies that where the transfer did not attract the 10% rate of stamp duty initially, but the unit subsequently becomes a relevant residential unit at a later date, the increased rate of stamp duty shall apply at that later date in respect of the earlier transfer
  • Clarification that the transfer of certain shares relating to residential units are to be charged at other rates of stamp duty
  • Certain additional anti-avoidance measures have been introduced


An Taoiseach Michéal Martin was unequivocal in his comments in May stating that no local authorities should be engaging in long term leases with institutional investors. However, given the amendments to the Financial Resolution contained in the Bill allowing for exemptions and clawbacks from the increased stamp duty rate for certain leases with local authorities, this is somewhat of a turnabout by the Government in its treatment of leases granted by investors to local authorities. It may be that the matter of investors granting long leases to local authorities for social housing purposes was not fully contemplated or considered at the time the Financial Resolution was drafted.

Nevertheless, these exemptions and clawbacks afforded to investors who lease properties to local authorities under the Mortgage to Rent scheme or for other social housing purposes, appear to confirm that leasing to local authorities remains a key feature of the Government's broader social housing agenda.

Finally, it's clear that the Government's approach to disincentivise funds from bulk-buying residential units is an evolving one and there may be more "twists and turns" on this hotly debated issue in the days ahead which we will continue to monitor.