Taxation on property transfers should be more straightforward from next year with the abolition of the 35 per cent capital gains tax.
From January, sellers will only be charged a final withholding tax on the value of the property.
For property acquired before 2002, a 10 per cent tax on the value, instead of the current 12 per cent, will have to be paid. In case of property acquired after 2002, the tax will be 6.5 per cent for individuals and eight per cent for property traders.
Over the years, the system has been amended several times. The government says the latest change will improve efficiency in tax collection. At the same time, the scheme for first-time buyers introduced in last year’s Budget will be extended.
This concession, which exempts buyers from paying stamp duty on the first €150,000 of the property value, will be extended for all contracts concluded by the end of June.
In case of contracts for the division of immovable property where the owner acquires a share that has the same value as when it was undivided, no tax will be payable.
This measure will give owners the chance to divide property between them without having to pay excessive taxes. Co-owners will have the facility not to sell their share.