The government is to impose a 10% rate of stamp duty on the bulk purchase of homes.

The Dáil will be asked today to approve a financial resolution to this effect, with purchases of ten or more housing units subject to the tax, and the charge will also apply to a situation where a buyer acquires ten or more units on a cumulative basis, over a 12 month period.

Once triggered, the 10% rate will apply to all houses acquired in that 12-month period, including the first nine purchases.

Finance minister Paschal Donohue (pictured) said that the 10% rate is intended to provide a significant disincentive to the practice of multiple purchase by institutional investors of large parts of or entire housing estates before they reach the market, thus denying first-time buyers an opportunity to purchase a home.

However, the stamp duty impost will not apply to the multiple purchase of apartments.

In Association with

The minister said apartment developments face significant viability challenges. "There are clear indications that any additional cost burden in apartment developments would have significant negative consequences for supply and, consequently, impact on our future housing model, in particular for urban living,” he stated

The higher rate of stamp duty will not apply to multiple purchases by Local Authorities, approved housing bodies, and the Housing Agency.

The main features of the stamp duty proposal are as follows:

1. The higher stamp duty rate will be 10%.
2. It will apply to multiple purchases of 10 and more houses within a 12-month period. Apartments are fully exempt from this higher stamp duty as are multiple purchases by Local Authorities, approved housing bodies, and the Housing Agency.
3. While the higher rate of stamp duty will apply automatically to all bulk purchases of 10 or more, it will also apply on a cumulative basis where for instance a person is purchasing regularly on a unit-by-unit basis. This is an important safeguard, as otherwise the policy intent of disincentivising multiple purchases could be circumvented through a series of smaller purchases.
4. The higher stamp duty charge will therefore take effect once a 10th property is purchased in a 12-month period. This means that where a person or institution has purchased incrementally and reaches the 10 threshold, the higher stamp duty will apply to all of the other previous 9 purchases also. In such a situation where they have already paid the standard stamp duty rate, this payment will be offset against this new 10% charge.
5. It will apply to all Irish dwellings (other than apartments) acquired, regardless of location. That is, it will apply where there are multiple dwellings in one estate or a single dwelling each in different locations across the country.
6. It will also apply in circumstances where multiple purchases of residential units are made indirectly through shares or units of investment funds.
7. On the advice of the Attorney General’s office, there is a requirement for a three-month transition period for execution of contracts that have been entered into but not completed prior to the commencement of the financial resolution.
8. Units purchased before the resolution comes into effect can be counted towards triggering the threshold of 10, but higher stamp dates can only be applied to units bought after the introduction of the FR. For example, if there were six units bought in April, and five units bought in June, the April purchases would enable the higher stamp duty charge to be applied to the June purchase only.