Brian Lenihan Jnr (Dublin West, Fianna Fail)
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As the Deputy is aware, I announced in Budget 2011 a major reform of the charge to Stamp Duty on residential property transactions, which applies to all instruments executed on or after 8 December 2010. These changes have simplified the system by lowering the rates applicable and abolishing a number of exemptions and reliefs. The changes in rates are as follows: Stamp Duty rates on transfers of residential property up to 7 December 2010

New Stamp Duty rates on transfers of residential property from 8 December 2010

Aggregate Consideration Rate of Duty

In order to broaden the tax base, a number of reliefs and exemptions have been abolished as follows:

- First Time Buyer's Relief;

- Relief from Stamp Duty on new houses under 125 sq metres;

- Reduced Stamp Duty on new houses over 125 sq metres

- Consanguinity relief in respect of residential property transfers;

- Exemption for residential property valued under €127,000; and

- Site to child relief.

There is also a transitional measure in place, for circumstances where the effect of these changes is to increase the Stamp Duty payable on the transaction. Stamp Duty can be paid under the old regime where a binding contract is in place before 8 December 2010 and the instrument is executed before 1 July 2011.

The Deputy asked about an individual who paid a deposit for a residential property in November 2010. If a legally binding contract to purchase the property was in place before 8 December 2010, that person can avail of the Stamp Duty rates that were in place before Budget 2011, or can opt to avail of the new rates, whichever is more beneficial. If there was no legally binding contract the new rates of Stamp Duty will apply. It should be noted that, for a contract to be legally binding, it is not necessary for it to be set out in writing. The individual's solicitor should be able to advise whether a legally binding contract was in place at that time.