Repayment of stamp duty where land used for residential development

Section 83D of the Stamp Duties Consolidation Act 1999 (inserted by section 61 of the Finance Act 2017) (“Section 83D”) applies to:-

• instruments executed on or after 11 October 2017; and
• that relate to the transfer of Irish land (on which stamp duty is initially payable at a rate of 6%).

Section 83D establishes a repayment mechanism for stamp duty paid on the acquisition of land on which residential property is built (up to a maximum amount of two thirds of any such stamp duty paid), provided the following conditions are met:-

(a) construction operations of one or more dwelling units commenced on or before 31 December 2021; and
(b) construction operations on the land commence pursuant to a commencement notice within the period of 30 months following the date of execution of the instrument.

While it is not yet clear how it will be monitored or implemented, the stamp duty repayment itself 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 (the “Date of Acknowledgement”); or
• when the development is completed:
  • at least 75% of the total surface area of the land is not occupied by dwelling units; or
  • 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 Repayment

The amount to be repaid shall be 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.

If the maximum amount of stamp duty is repaid under Section 83D, the effective rate of stamp duty ultimately payable would be 2%. 

Making a Repayment Claim

Once construction operations have commenced pursuant to a commencement notice, a claim for a repayment can be made by electronic means (in a form and manner yet to be specified by Revenue). Each claim should:-

• include a statutory declaration stating that conditions (a) and (b) above have been satisfied; and
• where a claim relates to a part of the stamp duty paid on the stamping of an instrument, the proportion of the area of the land represented by the appropriate part, or as the case may be, the proportion of the land occupied by the single dwelling unit.

All relevant documentation should be retained by the claimant for six years commencing on the Date of Acknowledgement, as same may be requested by Revenue to evidence the legitimacy of any such claim.

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.

While the above relates to multi-unit single phased developments, Section 83D also applies to single-unit developments and multi-phased developments with the conditions set out above modified accordingly. 

To find out what Section 83D means for you with regard to proposed residential development, please contact Anthony Smyth or Tara Keaney from our Tax team; Michael Walsh or Neil Dunne from our Residential Property team; or your usual ByrneWallace contact.