Stamp duty stance to cost buyers €27m-plus

FIRST-TIME buyers who bought houses between December and April are to lose out on a rebate of more than €27 million because of Finance Minister Brian Cowen’s refusal to backdate a stamp duty exemption to the budget.

Mr Cowen indicated on Budget Day on December 6 that there would be no changes in the stamp duty regime.

However, Fianna Fáil subsequently announced that abolishing stamp duty for first-time buyers would be a key component of its general election manifesto.

When the party returned to power after the election, Mr Cowen introduced legislation to fulfil the manifesto commitment.

He backdated it to apply to first-time buyers who presented their deeds to the Revenue Commissioners on or after April 30 this year.

But Fine Gael argued Mr Cowen should have backdated it to the December budget.

The party said it was wrong that people who took Mr Cowen at his word on Budget Day, and subsequently bought houses between then and April, would miss out on the stamp-duty exemption.

But Mr Cowen refused, saying he had no plans to make any further changes to the legislation.

Now, figures provided to the Irish Examiner indicate just how much the first-time buyers in question stand to lose.

The Revenue Commissioners estimate that the stamp-duty exemption will cost the State €66 million in a full year.

Revenue believes it will cost only €44m this year because the exemption does not apply to the first third of the year.

This suggests first-time buyers paid approximately €22m in stamp duty between January and April — or €5.5m each month.

When December is added in, the estimate comes to €27.5m paid in stamp duty that the affected first-time buyers won’t get back.

The Fianna Fáil manifesto commitment provided that first-time buyers who presented their deeds to Revenue on or after April 30 would qualify for the exemption.

However, because conveyances are required to be presented to Revenue within 30 days of the transaction, the legislation was written to include all deeds executed from March 31.

For example, a first-time buyer who executed a deed of transfer on a property on April 1 l and presented it to Revenue on April 15 will qualify for a refund of any stamp duty paid as the deed was executed on or after March 31.

The Department of Finance recommends that, where first-time buyers are unsure as to whether their deeds were executed before or after March 31, they should contact their solicitor.