An important change in stamp duty was announced in last week’s Budget, according to Michelle Burke of Premier Properties.
“Both sellers and trader uppers got an early Christmas present from Minister Brian Lenihan,” Ms Burke said. “With immediate effect all stamp duty across the board will be charged at one per cent up to one million euro and at two per cent over this figure — not many houses are selling in Galway over one million euro today. This is good news for the property market.
“For example, a residence selling at €425,000 prior to last week’s budget would have attracted a stamp duty sum of €21,000, whereas now stamp duty is reduced to €4,250, a significant saving of €16,500,” she explained.
“What this means, is that heretofore buyers would have factored in their stamp duty obligations when they were placing offers on property, and an offer that was just about too low would have been refused. Now there is extra movement, allowing more room to negotiate.
“In the past heady days of the property boom, a seller would have immediately sought to gain from the change of stamp duty by raising their house price to factor in the benefit the buyer got,” Ms Burke added. “However, in today’s market this would not be tolerated.
“Unfortunately, first time buyers got stung for stamp duty. Whereas prior to the budget no stamp duty applied to a first time buyer, now they too will be obliged to pay the flat one per cent rate. This class of buyer is buying in the range of €200,000 to €300,000, so stamp duty will not be penal at one per cent.”
It is expected that the change in stamp duty will stimulate the market in the New Year by having the effect of encouraging previously reluctant buyers to take the plunge. It will also give relief to the vendors of the higher value homes who will see more activity on their property.
Michelle Burke MIPAV is available to give advice to anyone with any property queries. She can be contacted at (087 ) 2500716.
