Dear Minister Donohoe – An Open Letter To Paschal Donohoe Minister for Finance
1st October 2020
Firstly I’d like to commend you and your colleagues in Government for the handling of the current Covid crisis. It is uncharted territory and your role in this has shown great leadership and honesty.
I know you are busy preparing the upcoming budget. I know I am late with my suggestion but I would be grateful if you could consider it for this budget.
Currently Stamp Duty for the purchase of Commercial Buildings in Ireland stands at 7.5%. This creates a barrier for entry for any prospective first time buyers trying to enter this market. I am suggesting removing / reducing this tax for first time buyers of Commercial Buildings.
I understand property deals can be complex and involve multiple shareholders so understanding how this would work would require some thought, but I have prepared some suggestions below.
How it could work?
- If the property is bought personally then the tax is removed / reduced on the transaction.
- If the property is bought personally and the tax is not removed on the transaction then the amount of capital invested can be used to offset against income tax in future years (similar to the EIIS scheme).
- If the property is bought through a company (1 Shareholder) then the amount of capital invested into the company to purchase the property can be used to offset against income tax in future years (similar to the EIIS scheme).
- If the property is bought through a company (Multiple Shareholders) then the amount of personal investment used to purchase the property can be used to offset against income tax in future years (similar to the EIIS scheme).
I would appreciate it if you could look into this as I believe it would incentivise and help first time buyers to purchase commercial property.