The reduction in Stamp Duty payable on the purchase of Commercial Property from 6% to 2% announced in Budget 2012 this month is a welcome change. An incentive was needed to shift some of the large number of office blocks around the country. Estate Agents have welcomed this reduction and they appear to be optimistic that this change will have a positive effect on the market. There also appears to be considerable interest in Commercial Property from foreign individuals and companies.
A further incentive is that for Commercial Property purchased between 1st January 2012 and end of 2013, there will be no Capital Gains Tax (CGT) on a gain provided it is held for at least seven years. This is an important provision as it allows the scope for an improvement in prices without penalising such growth. It may improve confidence as well as being a tangible benefit.
The rate of Capital Gains tax has also been increased to 30% from 25% in respect of disposals made after the 6th December 2011. This means that if you owned Commercial Property before the Budget and sell it making a gain, you will be liable to pay tax to the Revenue Commissioners at a new rate of 30% instead of 25% which is a significant increase. Changes have also been made to Capital Acquisitions Tax - see our article on these changes.
Commercial Property Tax Incentives
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Stamp Duty for Commercial Property reduced from 6% to 2% in Budget 2012.
Published in
Conveyancing
