The stamp duty rate for commercial property transfers will be reduced from the current top rate of 6% to a flat rate of 2% on all amounts from midnight tonight (6 December) in respect of all non-residential property. “Bringing down the cost of acquiring commercial property will have a positive effect on the property sector and indirectly on jobs in construction and related activities,” he said. The current stamp duty arrangements for residential property will continue to apply with 1% on transactions up to and including €1m (£859m) and 2% thereafter.
He has also introduced a capital gains tax incentive for property purchased between midnight tonight and the end of 2013. If a property is bought during this period and held for at least seven years, the gain attributable to that seven year holding period will be relieved from Capital Gains Tax.
“When the development and construction bubble burst, the consequences were dire,” he said. “A sector which amounted to around 20% of GDP has been reduced this year to around 5%.” A massive hole was made in the government finances through the loss of revenue including stamp duty, vat, income tax, and capital gains. “Even worse, the previous Government neglected the imploding construction sector, which has lost 164,000 jobs since the first half of 2007," he said. "We cannot restore all of these jobs but we can create the right conditions for construction employment to return to normal sustainable levels.”
All successful economies have a strong construction and development sector and a sustainable property sector, said Noonan. He said that the new measures designed to restore some confidence and to renew activity in the construction, development and property sectors. They follow the announcement of a multi-year capital budget of €17m.