Property related tax measures

Oct 22, 2018

In addition to the measures introduced on Budget day which granted landlords a 100 percent deduction against rental income for interest on qualifying loans, the rules for claiming rent-a-room relief have been amended to put beyond doubt that income from Airbnb lettings does not qualify for the exemption.  Other stamp duty measures introduced include some procedural changes when dealing with “resting in contract” scenarios and a right to appeal in relation to stamp duty repayments.

Airbnb

The amendment to section 216A TCA 1997 stipulates a minimum rental period of 28 days to expressly exclude short-term lettings from benefiting from rent-a-room relief. Helpfully, the amendments to the section state that income from the provision of accommodation for respite care purposes, along with income from exchange students or five day week digs qualifies for rent-a-room relief.  While the amendments take effect from 1 January 2019, Revenue issued Tax and Duty Manual, Part 04-01-20 setting out its position on the taxation of income from Airbnb earlier this year and also wrote to 12,000 recipients of Airbnb income in September  as part of a tax compliance initiative. 

Landlord interest deduction

The Case V deduction for a 100 percent interest deduction for landlords on residential letting was also formally reinstated under the Bill and will apply from 1 January 2019.

Resting in contract

Section 31 and 31A SDCA 1999 are amended to provide for some procedural changes to the payment of stamp duty for “resting in contract” scenarios.  In these instances, the payment of stamp duty arises on the signing of a contract rather than on an actual conveyance or transfer on sale.   A ‘credit’ for stamp duty paid is then provided for in the event that there is a subsequent conveyance or sale.   Instead of transferring the stamp duty paid on the contract to the executed instrument, Revenue will now issue a stamp certificate stating that the later instrument is not chargeable to stamp duty. 

Right of appeal – repayment of stamp duty

The Bill amends Section 21 SDCA 1999 to insert a right of appeal for the taxpayer to the Appeal Commissioners against a decision made by Revenue in relation to a claim for a stamp duty repayment.  This technical change is required in order to make a valid appeal under section 949J TCA 1997.