The Minister has increased the standard rate of VAT from 21% to 21.5% with effect from the 1st of December 2008.
Commercial Property: The top rate of stamp duty on commercial property has been reduced from 9% to 6%. The reduced rate applies in respect of Instruments executed on or after the 15th of October 2008. A rate of 9 % on non residential property over €150,000 was extremely penal, and one of the highest in Europe. The reduction of the rate to 6% must be welcomed.
Extension of stamp duty (young trained farmers relief): The stamp duty relief for young trained farmers (those under 35 years of age with specific agricultural training) which was due to expire on the 31st of December 2008 has been extended for four years and will now apply until the 31st of December 2012.
Extension of Stamp Duty Relief for Farm Consolidation: Relief from stamp duty is available to encourage the exchange of farmland between farmers to consolidate each farmers holding. This should have the effect of reducing fragmentation. The termination date of this relief is now set at the 30th of June 2011.
LOCAL AUTHORITY CHARGE
The introduction of what is effectively a property tax has been introduced in this Budget. The new charge is set at €200 per residence and applies to owners of private residential accommodation, holiday homes and other non principal private residences. It does not apply to new dwellings as yet unsold.
CAPITAL GAINS TAX
The rate of capital gains tax has increased from 20% to 22% from midnight of the 14th of October 2008. In addition to this change, the Minister announced that he was bringing forward the payment dates in respect of disposals made in the 2009 tax year as follows:
|Disposal||CGT Due Date|
|1st January 2009-30th November 2009||Mid December 2009|
|1st December 2009-31st December||31st October 2010|
Given that proceeds are not generally received at the date disposal, this could create significant cash flow difficulties.
If you have any queries in relation to the above please do not hesitate to contact one of the following in our Commercial Property Team:
19 November 2008