Gillian Nelis in the Sunday Business Post tells us that Minister for Finance Brian Cowen has proposed changes to close stamp duty avoidance schemes in which property developers leave site purchases ‘‘resting on contract’’ or enter into licence agreements with landowners.
Minister for Finance Brian Cowen has proposed changes to close stamp duty avoidance schemes in which property developers leave site purchases ‘‘resting on contract’’ or enter into licence agreements with landowners.
The changes were introduced by amendment at the committee stage of the Finance Bill last week and affect both the purchase of land and agreements for leases.
Until now, land purchase transactions could be structured in such a way that developers could pay no stamp duty on the purchase of multi-million-euro properties.
Among the changes proposed are that if the holder of an interest in land enters into a contract or agreement for its sale, and payments amounting to 25 per cent or more have been made, an executed conveyance or transfer must be presented to the Revenue Commissioners for stamping within 30 days from the date of the contract.
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‘‘If this is not presented, then the contract or agreement is deemed a stampable instrument as if it was a conveyance or transfer,” said Conor Lupton, a partner in McKeever Rowan solicitors in Dublin.
‘‘The minister has also proposed that if a holder of an interest in land enters into an agreement with another person where the other person is entitled to build on that land or carry out development, and payments amounting to 25 per cent or more of the market value of the land has been made, then within 30 days from the date of the agreement it is chargeable with stamp duty as if it was a conveyance or transfer.”
Another change tabled by the minister involves the leasing of land.
‘‘If an agreement for the lease of land is entered into for a term exceeding 35 years, and where 25 per cent or more of the consideration has been paid, then this agreement would be charged with the same stamp duty as if it was an actual lease made for that term and consideration mentioned in the agreement,” said Lupton.
The Finance Bill has now passed committee stage, and the amendments are likely to be included in the Finance Act, which is due to be introduced into law some time before April 5.
"However, these provisions will be introduced by ministerial order subsequent to the legislation being enacted,” said Lupton.