Here’s another normative question as per the land banking post last week.  When is a new property a new property?  The question arises because cash-strapped developers have been renting out the properties they have been unable to sell (see here for more details).  As far as the Revenue Commissioners are concerned this means that the property now becomes ‘second-hand’ and therefore liable for stamp duty except for first-time buyers.  It seems that the stamp duty exemption only applies if the property is sold immediately after construction or are not lived in prior to sale.  The CIF and the developers it represents wants a change so that the properties are considered ‘new’ up until the first time they are sold.  Their argument is that it penalises developers for trying to find a cashflow and make ends meet by making the units less attractive to buyers (who have to pay the duty).  And by default, it penalises buyers who previously wouldn’t have been liable for the duty.  The flip side is that the property is clearly not ‘new’ in the sense that people have been living in it and, at a time when the state needs all the revenue it can generate, any change in the rules will deny a source of duty.   So, the question is – at what point does an unsold property stop being a new property?  When it is first lived in or when it is first sold?

Rob Kitchin

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