Extension of Tax and Duty Relief on Transfers of Immovable Property

The following schemes allowing for the reduction in tax and/or duty on the acquisition of immovable property were extended:

• Transfer of Family Business Scheme
• First-time Buyer Scheme
• Second-time Buyer Scheme
• Reduced rate of duty on inherited immovable property
• Relief from Income Tax and Duty on certain property transfers

Hereunder is a summary of each scheme.

Under this scheme, duty on the transfer of company shares and commercial tenements in intra-family donations is reduced from 2% or 5% to 1.5% on the real value. This now applies until the extended date of 31 December 2026, provided that the relevant notice is submitted to the Commissioner for Tax and Customs by the same date.

The reduction applies in the case of a transfer of marketable securities issued by a company, or of immovable property being a commercial tenement used in a family business for at least 3 years preceding the transfer by donation from an individual to qualifying family members. A qualifying family member refers to one’s spouse or partner in a civil union, descendants and ascendants in the direct line and their relative spouses or civil union partners or in absence of descendants to one’s brothers or sisters and their descendants.

This reduction in duty applies provided that the donee does not transfer the securities/commercial tenement, inter vivos, within 3 years from the donation and uses the commercial tenement within a business carried on by the donee for 3 years following the donation.

No other exemption or relief from duty may be availed of.

The First-time Buyer Scheme provides for a duty exemption on the first €200,000 of the consideration paid on the inter vivos acquisition of the first immovable property intended to be used as the buyer’s sole ordinary residence. Whereas this exemption previously operated as a temporary measure subject to annual renewal, this has been made permanent.

For qualifying acquisitions made on or after 28 October 2025, the exemption applies provided that the buyer has not previously acquired any immovable property inter vivos that is used or intended to be used as a residence. This includes land, airspace or other immovable property acquired for the purpose of constructing or developing a residential property, or in respect of which a development permit or application for such permit exists.

With effect from 28 October 2025, an individual will not be disqualified from benefiting from this scheme as a result of previous acquisitions of non-residential property.

A previous acquisition of an undivided share in immovable property is disregarded where the aggregate share acquired constitutes less than 25% of the real value of the property, provided that neither the first-time buyers’ scheme nor the reduced duty rate under article 32(4)(a) of the Duty on Documents and Transfers Act was applied to such acquisition.

The incentive applies to individuals who, by 31 December 2026, replace their sole residential property with another within 12 months from vacating the first. Duty on the first €86,000, or the pro-rata portion in case of co-acquisition, of the value of the replacement property is refunded. Such incentive applies provided that:

• The replaced property has been owned and occupied as own residence for a period of at least 3 consecutive years immediately preceding the date of transfer.
• The acquirer does not require a permit in terms of Immovable Property (Acquisition by Non-Residents) Act.
• Replaced property must have qualified for a reduced rate of duty upon acquisition for the purpose of establishing therein or constructing thereon the sole, ordinary residence of the transferor.
• The replacement property is acquired by the transferee inter vivos for the purpose of establishing therein or constructing thereon their sole, ordinary residence but not through a donation from close relatives as defined.
• At time of acquisition, the transferee must not own any other residential property acquired inter vivos other than the replaced property.
• If the replaced property had qualified for the duty exemption under the First Time Buyer Scheme certain duty exemptionor as a donation granted for the purpose of establishing / constructing a sole, ordinary residence, 5 years must pass before this incentive can be availed of.
• Whereas the relevant duty form must reach the Revenue by 28 February 2027, the claim for duty refund must be made in writing within 6 months from the contract.

The relief whereby no income tax and duty are payable on the first €750,000 of the transfer value of transfers of (i) property that is vacant for at least 7 years and whose construction was completed at least 20 years before the date of the transfer, and (ii) property situated within an urban conservation area has been extended to transfers made by not later than 31 December 2026, provided that the relevant notice is submitted to the Commissioner for Tax and Customs by 31 January 2027.

In addition, the refund of duty paid on the first €750,000 of the transfer value of property that is developed by the transferee in conformity with criteria approved by the competent authority was also extended to 31 December 2026, provided that the relevant notice is submitted to the Commissioner for Tax and Customs by 31 January 2027.

With effect from 28th October 2025, the reduced duty rate of 3.5% applicable to transfers causa mortis of a dwelling house has been extended as follows:

• Where the property was the ordinary residence of the deceased and also occupied by one or more of the transferees at the time of transfer, the reduced rate applies to the value between €35,001 and €400,000 (up from €200,000), with the exemption on the first €35,000 remaining applicable.
• Where the property was not the ordinary residence of the deceased but was the ordinary residence of one or more of the transferees, the reduced rate applies to the first €400,000 of the value (up from €200,000).

Where the deceased held only a partial interest in the property, the value qualifying for the reduced rate is adjusted proportionately. The existing exemption applicable to transfers causa mortis of the ordinary residence of the deceased in favour of the surviving spouse remains unchanged.

Should you require any further information in this respect please do not hesitate to contact the undersigned or your KPMG contact.