The Finance Bill included a number of legislative amendments in relation to property provisions. Below I have highlighted the main changes that will come in to effect.
The Bill provides for an extension of three years for the relief available for landlords on pre-letting expenditure incurred on vacant residential premises. The relief will now apply to expenditure incurred up to 31 December 2027.
Relief for renters was introduced in Budget 2023. Finance Bill 2024 has increased the annual tax credit available on principal private residences from €750 to €1,000 for individuals and €2,000 for married couples. The increased tax credit will be available to claim for the 2024 and 2025 tax years.
The Help to Buy scheme provides relief to first-time buyers in the form of a rebate of income tax, including DIRT, paid over the previous four tax years. The enhanced scheme, which was first introduced in July 2020, has been extended to 31 December 2029.
The definition of “qualifying residence” under the scheme has been amended to ensure that a newly constructed property purchased by a Local Authority for onward sale to an affordable purchaser under the Local Authority Affordable Purchase Scheme is eligible for the relief.
The mortgage interest tax relief for homeowners has been extended for another year. Interest tax relief is available in respect of the increase in mortgage interest paid in 2024 compared to 2022. This relief is available to LPT-compliant homeowners who have an outstanding mortgage of €80,000 - €500,000. Relief will be available at the standard rate of income tax, with the maximum relief capped at €1,250 per property. There are anti-avoidance provisions which apply for acquisitions of residential property from connected parties.
The Bill introduces provisions to take account of the measures announced by the Budget to include a number of amendments to the Residential Zoned Land Tax, including the introduction of certain exemptions and deferrals. In particular the Bill includes provisions for a land owner to claim an exemption from the tax where the owner of the site has requested the rezoning of the land.
The Bill introduces provisions to take account of the measures announced by the Budget which included an increase in the rate applicable of VHT from five times the basic local property tax rate to seven times that rate. This increased rate of VHT will take effect from the next chargeable period for VHT commencing on 1 November 2024.
As announced in the Budget, the rate of stamp duty applicable to residential property valued above €1.5 million will increase to 6%. The existing rate of 1% will continue to apply to values up to €1 million, and 2% will apply on values above €1 million, with the new third rate of 6% to apply to any value in excess of €1.5 million (the 6% rate will apply only to the increment above €1.5 million only). As currently drafted the 6% is not intended to the purchase of 3 or more residential units in an apartment block. As drafted the increased rate will apply to consideration attributable to the acquisition of 2 residential units in an apartment block.
The Bill provides for an increase in the rate of stamp duty where 10 or more houses are acquired in any 12-month period, from the current rate of 10% to a higher rate of 15. This increased rate is to apply from midnight on 2 October 2024, with transitional arrangements for transactions in progress which are completed before 1 January 2025.
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