2009 Irish Budget Changes effecting Property Investments

14 october 2008
DG International Tax
The Irish Minister for Finance announced the 2009 Budget on 14th October 2008. A summary of tax changes effecting Property Investments are as follows:

Income Tax :  The standard rate band increases by €1,000 for a single person (€2,000 for a married couple).
The new standard rate bands from 1 January 2009 are as follows:

    2008  Proposed 2009




 Married one income

 €44,400  €45,400

 Married two incomes



The maximum transferability between spouses of €44,400 in 2008 is increased accordingly to €45,400 in 2009.

Mortgage Interest Relief : The current rate of mortgage interest relief for Irish residents is to increase from 1 January 2009 for first time buyers from 20% to 25% in year 1, year 2 and to 22.5% in years 3, 4 and 5. Non-first time buyers relief is reduced from 20% to 15% from January 2009. The ceiling on the maximum sum allowable for claiming mortgage interest relief has not changed so in real terms the change in the rates of relief will not offer much respite to any taxpayer having difficulty in meeting mortgage repayments.

DIRT (Deposit Interest Retention Tax) on interest earned from deposit accounts increases by 3% to 23%. The exit tax on Life Assurance policies & Investment funds increases by 3% to 26%.

VAT : the standard rate of VAT will increase from 21% to 21.5% with effect from 1 December 2008. This will impact new properties sold after this date.

Corporation Tax remains at 12.5%.

Stamp Duty : Commercial Property

The top rate of duty is being reduced from 9% to 6% in respect of instruments executed on or after 15 October 2008. The new rates are:

 Aggregate Consideration  Rate of Duty
up to €10,000   exempt
€10,001 - €20,000   1%
 €20,001 - €30,000     2% 
 €30,001 - €40,000    3%
 €40,001 - €70,000   4%
 €70,001 - €80,000   5%
 Over €80,000   6%



Capital Gains Tax : The rate of capital gains tax is being increased to 22% from 20% in respect of disposals made from midnight on 14 October 2008. 

Change in Payment Dates

The payment date in respect of disposals in the period January to November is being changed to mid-December and the tax on disposals in December will now be due on the following 31 October (the existing pay and file date).



Charge on Non-Principal Private Residences

A charge on all non-principal private residences will be introduced in 2009. The new charge will be set at €200 per dwelling and will be levied and collected by local authorities. It will be payable by the owners of private rented accommodation, holiday homes and other non-principal residences but will not be applied to new dwellings as yet unsold.


For more details on the impact of the 2009 Budget, please contact DG International Tax at info@dgitax.com

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