Ireland Fact-File Part 7:
Personal Business Owner Welfare and Lifestyle

7.8 Ireland Domestic Real Estate

Domestic real estate and its tax treatment

In terms of accommodation in Ireland, a wide variety of property is available for small business owners and operators to purchase or rent, and it is also possible to build one's own property in Ireland, although this is not without its complications, both bureaucratic and practical.

Property-related taxes which can be imposed on small business owners and operators include stamp duty, capital gains tax (if the property in question is not the taxpayer's primary residence), and capital acquisitions tax, if the property is inherited from an Irish resident.

Rates (property taxes) are also imposed by municipal authorities on commercial properties.

Capital Acquisitions Tax is imposed at 25% from April 2009, (the rate was previously 22% between November 20, 2008 and April 7, 2009, and 20% between December 1, 1999 and November 19, 2008) on gifts and inheritances, if either the donor of the gift/the testator or the recipient of the gift/the heir is an Irish resident.

Updated in December 2010 The threshold at which such a levy kicks in varies according to the relationship between the parties involved. In 2011, a child, stepchild, adopted child or parent) must pay the tax on gifts/inheritances over EUR332,084 (decreased by the December 2010 austerity budget from EUR414,799 previously); a parent who does not take complete ownership of an inheritance, a grandparent, a grandchild or great-grandchild, a sibling, a nephew or a niece will pay on sums of over EUR33,028 (down from EUR41,481 previously); and any other type of recipient will face Capital Acquisitions Tax on acquisitions of over EUR16,604 (down from EUR20,740 previously).

The introduction of a new property tax was recommended in the Commission on Taxation’s September 2009 report, which looked at ways to reduce the deficit.

In the austerity budget delivered in December 2010, it was announced that previously available reliefs (including for first time buyers and properties under EUR127,000) were abolished, and that with immediate effect, stamp duty at 1% would be imposed on property transactions of up to EUR1mn, with a 2% rate to be imposed above that threshold.