Recent Legislative changes affecting Residential Property

• An annual self-assessed Local Property Tax (LPT) charged on the market value of all residential properties in the State came into effect with the passing of the Finance (Local Property Tax) Act 2012. This tax came into effect on 1 July 2013 and the rate is based on the market value of the property as at the 1 May 2013. From 2014 onwards, the liability date as to who is responsible for the payment of the tax will be the liable person (usually the owner of the property) as at the 1 November of the preceding year.
• Although LPT has effectively replaced the Household Charge, from 1 July 2013, any outstanding Household Charge liability (including late payment penalties) was increased to €200 and included as part of the LPT liability for a property.
• A Capital Gains Tax seven year relief was introduced in the Finance Act 2012 and applied to land and buildings purchased from 7 December 2011 up to 31 December 2013. The Finance (No. 2) Bill 2013 proposes to extend the CGT Relief to include purchases of land and buildings up to 31 December 2014. This relief will apply mainly to investors given that no Capital Gains tax liability will arise on the sale of a property used as a principal private residence.
• Mortgages taken out after 31 December 2012 no longer qualify for mortgage interest relief
• Finance Act 2011 abolished the stamp duty exemption for first time buyers. From the 8th December 2010 all purchasers of residential property, whether purchasing new or existing properties, will pay stamp duty of 1% up to a value of €1 million and 2% on any excess over that.