Property Tax Changes in Ireland

22 September 2009

The Commission on Taxation report released on September 9 included a number of changes to property tax in Ireland including the introduction of a new Annual Property Tax (APT).

Ireland's previous property tax systems had a number of different domestic property taxes for residential housing including rental income tax, domestic rates, residential property tax and farm taxes.

The Commission report recommends an entirely new system of property taxation in Ireland which would include an annual property tax to provide recurring, sustainable revenue for the Government.

The rate of the proposed annual property tax was not outlined in the report and will be for the Government to determine.

Important Annual Property Tax (APT) points:

- Annual Property Tax (APT) would be applied to each residential property in Ireland except houses rented from local authorities and social housing providers and some other limited exceptions.
- As APT would apply to rented properties, second homes and holiday homes, it would replace the €200 levy introduced in 2009.
- The APT would be calculated by reference to valuation bands.
- The APT would be paid by the property owner, probably through self-assessment.

Other important proposed property tax changes:

- Tax on windfall gains arising from increases in land value would be subject to additional capital gains tax
- New recurrent tax on zoned development land where land is not being developed
- Zero stamp duty on purchases of a principal private residence. The stamp duty on private residential units purchased for investment purposes will be synchronized with EU thresholds
- A higher rate of Capital Gains Tax (CGT) is proposed on profits and gains from the sales or exchanges of land development.

The Commission suggests that the new APT be implemented as soon as possible.