Stamp duty bid to boost property market

Tuesday 07 December 2010 19.39
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Budget 2011 - Move to stimulate property market
Budget 2011 - Move to stimulate property market
Air travel tax - Cut to €3 could be temporary
Air travel tax - Cut to €3 could be temporary

Finance Minister Brian Lenihan has announced what he called a 'fundamental reform' of stamp duty on residential property deals.

There will be a flat rate of 1% on all residential property deals up to €1m, with 2% on deals above €2m.

He said this was being done to stimulate the property market, to provide necessary valuation information and to increase transparency in the market. All existing reliefs and exemptions from stamp duty are being abolished, including for first-time buyers.

The new rates will apply to property transfers on or after December 8 this year, though there will be transitional arrangements for those in contracts to buy a property before that date.

The Minister also announced a reduced air travel tax of €3, down from the current €10. This will come into effect from March next year. But he said this was temporary, until the end of 2011, and would be increased unless there was an 'appropriate response' from airlines.

Mr Lenihan also said the Dublin Airport Authority would introduce an incentive scheme to provide a full rebate of airport charges for any extra airline traffic above current levels. A summary of Budget measures also signals that support for regional air services will be 'curtailed' in 2011.

Excise is to be increased by four cent a litre on petrol and two cent a litre on diesel, from midnight. The car scrappage scheme is to be extended for another six months to June 30. VRT relief for hybrid and flexible fuel vehicles are being extended.

The Minister also said he was ensuring that internet betting was subject to the same level of betting duty, 1%, as that which takes place in high street betting shops.

He also announced changes in the relevant contracts withholding tax, with a new rate of 20% applying to sub-contractors registered for tax. The existing 35% rate stays for sub-contractors not registered for tax.

There is to be a new incentive for improving energy efficiency in homes, with standard-rated tax relief available on spending of up to €10,000 on a list of approved works. The total available in a year will be €30m. Full details are to be provided in the Finance Bill.