Property

Housing

The Minister announced "an unprecedented level of investment" for the Government's Housing Programme in 2020, allocating €2.5 billion along with total spending on homeless services to increase to €166 million in 2020. An extra €2 million will be allocated to the Residential Tenancies Board to help secure compliance in rent pressure zones.

To support tenants currently benefitting under the Housing Assistance Payment Scheme, as well as 15,750 new tenants in 2020, the Government is allocating an extra €80 million to that scheme.

To support "new affordable homes" the Government is allocating an additional €17.5 million to the Land Development Agency, with €186 million being allocated to the Serviced Site Fund and Local Infrastructure Housing Activation Fund. The Government is also allocating €130 million to regeneration and development projects for cities and large towns.

€1.1 billion of capital funding will be allocated to social housing in support of delivering 11,000 new social homes during 2020.  The Minister confirmed that the Government is committed to delivering another 12,000 new social homes in 2021.

Stamp Duty

Stamp duty applicable to non-residential property transactions will be increased by 1.5% to 7% from midnight on 8 October 2019. The previous rate of 6% will apply to instruments executed before 1 January 2020 where a binding contract was in place prior to 9 October 2019. Amendments will be made to the applicable legislation to ensure that the rate of stamp duty remains at 2% (following stamp duty repayments) if the land involved is subsequently used for residential development.

Help to Buy Scheme and Living City Initiatives

The Government has extended the Help to Buy schemes and Living City Initiatives without any changes until the end of 2021 and 2022 respectively.

Irish Real Estate Funds (IREFs) and Section 110 Companies 

The Minster announced that the Revenue Commissioners have identified "aggressive activities" by some IREF's including the use of excessive interest charges to avoid the payment of tax on profits generated from Irish property. It was announced that several anti-avoidance measures are being introduced to counteract these activities, including the introduction of limitations on interest expenses based on debt to property cost and based on an income to interest ratio. These measures will be brought in by financial resolution and will apply with effect from midnight on 8 October 2019.

The anti-avoidance provisions in section 110 Taxes Consolidation Act 1997 are being strengthened to ensure they operate as intended. These changes will be brought in as part of Finance Bill 2019.

Real Estate Investment Trusts (REITs)

Several amendments have been announced to the existing REIT legislation to ensure that, in the words of the Minister, "an appropriate level of tax" is being collected from the regime. The changes will be brought in by way of financial resolution and will apply with effect from midnight on 8 October 2019.
 

For further information on Budget 2020, please contact Brian Duffy or your usual William Fry Tax contact.