If you are looking to purchase a piece of property in Ireland in 2021 there will of course be certain taxes that you have to pay. But what are these taxes specifically, and what kind of relief might I be able to receive that will help me pay them. We will discuss what kinds of tax you can expect on your new property and how to find tax relief that you might qualify for.
What Taxes Do I Need to Pay?
Irish Property will include:
- Land
- Non-residential and Residential buildings
- shares in Irish companies
- business assets
If what you are purchasing fits into any of these descriptions, then you are purchasing property in Ireland, and there will be certain taxes that you may have to pay.
The first tax you will have to pay on your property that you should be aware of is Local Property Tax. The amount of LPT you pay will depend on the market value of the property the taxes are associated with. This market value will be the absolute best price you would be able to sell your property for on the open market.
If you are going to buy a property it is important to acquire its property identification number for Local Property Tax and an estimated value from the party that is selling you the house, and you will to check and ensure that all payments and returns related to the LPT for the property have been filed and are up to date.
The next tax you will need to pay is called Stamp Duty. When you purchase property in Ireland, you will have ownership of the property transferred to you via an instrument (written document) that you have executed in some fashion (sealed or signed). Stamp Duty must be filed for return on paid on the instrument that you executed to transfer ownership.
Certain instruments may be exempt from the benefit of a tax relief or Stamp Duty.
What Kind of Tax Relief is Available?
There is a chance that you may qualify for certain forms of tax relief if you are purchasing Irish Property. These reliefs include:
- First-Time Buyers Relief: This relief applies to homes purchase between 14 October 2014 and 31 December 2017 and allows first time homebuyers to receive refunds on their DIRT (Deposit Interest Retention Tax) payments.
- Help to Buy Incentive: This relief applies to homes to homes purchase between 19 July 2016 and 31 December 2021 and helps first time buyers with their deposit needed to build or buy a new home. It provides this help by giving buyers a refund on DIRT and income tax payments they have made over the last four tax years.
- Mortgage Interest Relief: This relief only applies to homes purchase before 31 December 2012. It is used to reduce a buyer’s interest payments made on a qualifying mortgage loan. This kind of loan is a loan used to develop, repair, improve, or purchase your main residence.