Existing upward only rent reviews are confirmed; 2% stamp duty on commercial real estate from 6 December, 2011; and, For properties acquired by end 2013 and held for at least 7 years, no capital gains tax will accrue on gains made during the 7 year period. The Irish Government, as part of its Budget 2012, has announced:
Upward Only Rent Reviews
In the face of a collapse in rental values, particularly in the retail sector, the Government had committed to legislate to remove upward only rent reviews in leases created prior to March 2010.
The Government has confirmed that it is not possible to interfere with existing lease contracts due to constitutional constraints.
This confirmation brings certainty to the issue and will be welcomed in the investment market.
Upward only rent reviews are prohibited in leases created after February, 2010.
Multiple stamp duty rates for non-residential properties are replaced with a single rate of 2% in respect of instruments executed after 6 December, 2011. The previous maximum rate of 6% was chargeable for any property valued at more than €80,000.
This is a major reduction in transaction costs.
The theoretical costs to be netted from property valuations immediately moves from 8.42% to 4.42%.
Capital Gains Tax
A new incentive relief has been introduced. For properties acquired after 6 December, 2011 and before 31 December, 2013 and held...