Notary Public & Commissioner for Oaths


Budget 2014 – First-Time Buyers Exemption (FAQs)

Created on Monday, 25 November 2013 21:36

1. When are first-time buyers exempted from paying stamp duty tax?

Legal Notice 393 of 2013 clarifies that these conditions must be met in order for a first-time buyer to be exempt from paying stamp duty tax on the first €150,000:

  • This must be the first acquisition ever of an immovable property by the person concerned. Thus, a person who had already acquired, by purchase or donation, any immovable (including a garage for example) does not benefit from this exemption.
  • The final deed of sale must be made by the 30th June 2015.
  • Buyers who had registered a promise of sale before the 1st July 2013 shall not benefit from this exemption.
  • The buyers must make a declaration in the final deed of sale that this is their first acquisition and that they intend to reside in the property being purchased.

2.  If I sold my residential property and I’m buying a new one, will I be entitled to benefit from the exemption?

No. As explained above, the exemption is available only for persons acquiring their first immovable property ever.

3. If I cancel a promise of sale made before the 1st July 2013 and enter into a new one, will I benefit from the exemption?

If you enter into a new promise of sale with the same seller for the same property, then the Inland Revenue Department will be able to verify this and you will still not be eligible for the exemption.

If your promise of sale has really been cancelled and you eventually find a new property, you will be able to benefit from the exemption as this will be your first acquisition and the promise of sale is made after the 1st July 2013.

4. If I’m buying a property together with my fiancé/fiancée/partner, and only one of us is a first-time buyer, will we still benefit from the exemption?

Only the first-time buyer will benefit from the exemption. Thus, the share being bought by such person will be exempted from tax on the proportionate share of the first €150,000. The other buyer will pay ordinary stamp duty tax of 3.5% or 5% as the case may be.

Thus, let’s give an example of a couple buying a property for €150,000 in equal shares between them and only one of them is a first-time buyer. On his/her share of €75,000 there will be no stamp duty tax. On the other hand, the other buyer will pay ordinary tax on his/her share of €75,000.

5. If the property exceeds €150,000, how will the rest be charged?

The remaining amount of the price is charged at the rate of 5%.

6. Does this exemption affect property being donated for residential purposes from parents to children?

No. In the case of a donation of an immovable between parents and children, when the children declare that they have the intention of establishing in the property their sole ordinary residence, no stamp duty tax shall be due by the children on the first €250,000 provided that this is the first donation between such parent and child. Over and above this price, stamp duty tax shall be paid at the rate of 3.5%.

The parents also remain fully exempted from paying any capital gains tax on the full price.

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