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Stamp Duty and leases

  1. Overview
  2. Residential houses and apartments
  3. Agreements, assignments and surrenders
  4. Difference between a lease and a licence
  5. Rates
  6. Paying Stamp Duty on residential leases
  7. Varying a lease
  8. Transitional arrangements

Rates

Average annual rent

You must pay Stamp Duty on the average annual rent. The Stamp Duty rate you pay will depend on the period of the lease. The rates are set out below.

Stamp Duty rate on the average annual rent*
Period of the leaseStamp Duty rate on the average annual rent

Not exceeding 35 years, or indefinite

1%

Exceeding 35 years, but not exceeding 100 years

6%

More than 100 years

12%

*These rates predate the Stamp Duties Consolidation Act, 1999.

  • Example 1

    The period of a lease is 20 years. The rent for the first 10 years is €30,000 per year. For years 11 to 15, the rent is €40,000 per year and for years 15 to 20, it is €45,000 per year.

    The total rent payable over the 20 years is €725,000.

    The average annual rent is €36,250 (€725,000 ÷ 20).

    You must pay Stamp Duty on €36,250 at the rate of 1%.

  • Example 2

    The period of a lease is 36 years. The rent for the first five years is €30,000 per year. The lease contains a rent review clause. The rent for year 6 onwards will be negotiated in accordance with that clause.

    The total rent payable for the first five years is €150,000.

    The average annual rent is €30,000 (€150,000 ÷ 5).

    You must pay Stamp Duty on €30,000 at the rate of 6%. You must also pay a fixed duty of €12.50 for the rent review clause.

Premium

The rate you pay on a premium depends on the type of property covered by the lease. If the property is residential, you must pay the same Stamp Duty rate that you would pay on a transfer of residential property. If the property is non-residential, you must pay the same Stamp Duty rate that you would pay on a transfer of non-residential property.

The current Stamp Duty rates are set out below.

Stamp Duty rates on land and buildings
Type of propertyConsiderationStamp Duty Rate
Residential First €1 million 1%

Over €1 million 

and up to €1.5

million

2%

 

Over €1.5 million

6%

3 or more apartments

in the same block

First €1 million

1%

Over €1 million

2%

Relevant residential unit withing the meaning of Section 31E of the Stamp Duties Consolidation Act, 1999*

 -

15%
Non-residential - 7.5%

Note

*15% rate

Where 10 or more properties are purchased by way of a lease by a person (or connected person) within 12 months, those properties may be regarded as "relevant residential units". Further information is available in the Tax and Duty Manual Section 31E: Stamp Duty on certain acquisitions of residential property.

Fixed duty

You must pay a fixed Stamp Duty of €12.50 for:

  • a lease made at a later date for an agreement already stamped
  • any other lease relating to Irish land and buildings, or a right or interest in Irish land and buildings
  • and
  • a rent review clause. (You must also pay Stamp Duty on the lease containing the rent review clause. However if the lease containing the rent review clause is exempt from Stamp Duty, then the rent review clause is also exempt.)

Purchasing an apartment by way of a lease

A charge to Stamp Duty under the Lease head of charge arises on the creation of a lease and in certain other limited circumstances. However, a subsequent assignment or transfer of a leasehold interest is chargeable to Stamp Duty under the Conveyance or Transfer on Sale head of charge.

  • Example

    Sam purchases an apartment with a leasehold title for a term of 999 years. A lease is created for that term and the lease is stamped under the Lease head of charge.

    Three years later, Sam sells his apartment to David by assigning the unexpired term of the apartment (the 996 years left to run) to David. The deed recites that Sam is assigning the unexpired term for a consideration of €250,000. This assignment is stamped under the Conveyance or Transfer on Sale head of charge.

Next: Paying Stamp Duty on residential leases

Published: 14 November 2024 Print this page

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