Tenants could face 1% stamp duty bill

Stamp duty tax on rental tenants - Crowe Horwath Ireland

Did you know that as a tenant you could be liable to stamp duty on your private rented accommodation?

Stamp duty is the fee payable on the document used to transfer property, typically when purchasing a new home. However stamp duty is also payable on private leases where the rent is above €30,000 per year. This might seem like a lot to spend on rent but the cost of renting has skyrocketed in recent years, with some Dublin rents now higher than their peak Celtic Tiger levels.

Over half of three-bedroom Dublin city family homes currently up for rent through online property firm Daft.ie are quoting above the threshold, according to an analysis by Goodbody Stockbrokers. So, if you break €30,000 down, this works out at €2,500 per month and €833 per person where there are three tenants in the house. The rate of stamp duty is currently 1%, resulting in a potential stamp duty tax of €300 per annum, which the tenants themselves are liable to pay. They must file a stamp duty return to Revenue and pay the related amount.

Tenants need to be made aware of the possible liability to ensure no one is faced with a surprise tax bill which could include penalties for late payment of stamp duty.

The €30,000 stamp duty threshold was set in 2008, when it was raised from €19,050. This served to remove liability from most tenants during the financial crash but it is the recent jump in rents across the country which has now highlighted this possible tax liability.

For any additional information or help with any tax-related issues contact a member of our tax team.