- Utworzono: piątek, 23, luty 2018 07:59
A significant focus of Budget 2018 was the introduction of certain initiatives to tackle the stagnant housing market and to provide some impetus to assist in the timely delivery of new housing stock.
Amid the debate that followed Budget 2018, as to whether the introduction of the new 6% rate of stamp duty on the acquisition of commercial property was appropriate, the government simultaneously committed to a stamp duty refund scheme for commercial land that is purchased for the development of new housing.
When applied and subject to compliance with certain conditions, the intent of this refund scheme is to rebate two thirds (66.66%) of the 6% stamp duty amount paid on the acquisition of commercial land.
It is expected that formal Revenue guidance will issue in due course, providing the precise application of the scheme (particularly the requisite qualifying conditions and eligible development types), but for now the Finance Act 2017 (which was signed into law on 25 December 2017) (the “Act”) provides the broad framework for its operation.
It appears clear from the Act that the rationale of the scheme is primarily devised to reward those who can deliver housing rapidly, and it’s clearly designed to favour a straightforward situation where a site is purchased and developed over a short period of time. Some of the foremost considerations on the operation of the scheme, as provided by the Act, are as follows:
- the residential development must commence within 30 months following the purchase of the land, but no later than 31 December 2021;
- the scheme applies to development consisting of the construction of residential units, not the refurbishment or completion of existing or partly built units;
- development must commence on foot of a Commencement Notice which has been served in accordance with the Building Control Regulations;
- the development must be completed within 2 years of the acknowledgment of the Commencement Notice by the relevant Local Authority;
- there is a requirement that 75% of the relevant land is comprised of residential units or that the gross floor space of the residential units amounts to at least 75% if the total surface area of the land;
- claims are to be made electronically (presumably through the Revenue Online Service) and will need to be accompanied by a form of Statutory Declaration and other documents/ information, yet to be specified;
- the refund can be reclaimed following the commencement of the works. If the land is being developed in phases, it can be reclaimed on commencement of each phase in proportion to the land area in each phase; and
- the refund can be subject to claw back provisions, for example, if the conditions of the Act are not complied with or, in particular, where the works have not been completed within the 2 year deadline.
While the refund scheme is to generally be welcomed, its application in the context of the Act gives rise to several questions and issues and it is clear that more precise Revenue guidance is needed on the exact operation of the scheme and procedures to be followed.