Savills Question Wisdom of Increasing Commercial Stamp Duty

Savills Ireland has warned that any move to increase commercial stamp duty in next Tuesday’s budget could exacerbate the housing crisis. 

It has been widely rumoured in recent days that, with limited fiscal space available, the Government is scrambling to identify revenue-raising schemes.  And commercial stamp duty has seemingly fallen under the spotlight. 

Stamp duty on non-residential property transactions is currently 2% and €256m in tax revenue was raised from this source in 2016.  However, Savills’ Director of Research notes that most residential land sales – which are a necessary starting point for housing development – are classified as commercial property transactions. 

“The housing crisis originates from an absolute shortage of residential property. One reason for the shortage is that, in certain locations and for certain types of property, it costs more to develop units than they can be sold for. Raising the stamp duty on sites will make this worse by increasing costs at the very time when we should be reducing them.”