Tax Breaks : Property Pointers

Rent-a-Room Scheme
Where you rent out a room(s) in your principal private residence, you will be able to earn a portion of this income tax free in rental income. If you opt for this scheme, reliefs you are currently entitled to with respect to... Capital Gains Tax Stamp Duty and mortgage interest relief ...will be unaffected. From 1st January 2007, the reliefs will no longer apply where the room is let to a connected person who also claims rent relief.
Stamp Duty
Commerical Property In the budget for 2003, it was announced that changes would be applied to stamp duty rates and thresholds for commercial property. Commercial Property over €150,000 will now attract stamp duty of 9%. The new rate structure will apply for conveyances, transfers and leases executed on or after 4 December 2002. Residential Property The major news from Budget 2007...is that there is no news. Stamp Duty for first-time buyers (FTBs) has been left unchanged, as the Minister felt there would be no real gain for FTBs. Instead, mortgage relief has been doubled for FTBs. From 2nd December 2004, stamp duty for first-time buyers (who are owner-occupiers) of second-hand residential property has been majorly reduced according to this table: House Value Stamp Duty Rate up to €317,500 Now exempt - was up to 3.75% €317,501 to €381,000 Now 3% - was 4.5% €381,001 to €635,000 Now 6% - was 7.5% €635,000+ Unchanged at 9%
Reverse Premia
Where a payment is made to by a landlord to a tenant as an inducement to rent a property, this is known as a "reverse premium". The Finance Bill 2002 will make such payments liable to tax.
Other Points...
Finance Bill 2003 - interest relief for investors will not be available where money has been borrowed by one spouse to purchase the other spouse’s residential property, except in the case of legal separation or divorce. From January 1st 2002, interest arising on loans to buy, upgrade or improve property which is been rented out CAN be set off against rental income arising. This reverses the previous situation, and has been warmly welcomed by the construction industry. The Revenue Commissioners will clamp down on any attempt to defer interest payments which really arise in 2001, to 2002. The new rule will apply to an individuals, partnerships or companies. Section 23 exists to cover residential property for "groups with priority housing needs". Capital Gains Tax Rollover relief - in the budget for 2003, it was announced that rollover relief will be abolished. There is a tax break aimed at providing residential accommodation in the vacant space over commercial premises in five cities (Dublin, Cork, Waterford, Limerick and Galway). This is known as the "living over the shop scheme". The commercial premises must provide services that are only used locally. In the budget for 2004, it was announced that this tax break will be extended until 31 July 2006, provided a full planning application has been received in the planning authority by 31 December 2004. .
The Role of Boylan & Dodd
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