A clampdown on abuse of owner-occupier stamp duty relief by first-time buyers and others is to be extended nationally after a Revenue pilot project in Dublin found significant levels of non-compliance. John Downesreports.
The Dublin study found more than one in 10 of those scrutinised had either incorrectly claimed relief or had rented out their properties within five years, without paying this relief back as required.
The average amount assessed as owing in each of these cases was approximately €11,000, representing a total of €1.2 million.
A Revenue spokeswoman confirmed a decision has been taken to extend the stamp duty audit. A minimum of 1,000 further cases will now be selected throughout the Republic from a master list of transactions which have been identified as being at risk of abuse.
A separate but linked investigation will also examine the files of about 200 property investors who have bought more than one residence and who it is believed may have also incorrectly availed of the relief because they are not owner-occupiers.
Stamp duty relief is supposed to be paid back in such circumstances, in a measure known as clawback.
The new clampdown will focus on both self-employed and PAYE workers.
Unlike the pilot project, which examined only new house purchases, the extended investigation will relate to purchases of new and second-hand properties completed in 2005.
The results of this study will be reviewed at a later date, and a decision taken on whether to extend this further.
Individuals found to be in breach can face penalties including significant fines and even prosecution in the courts. Owner-occupiers are, however, allowed to rent out a room under the rent-a-room scheme.
According to the Comptroller and Auditor General's most recent annual report, the initial audit in Dublin found that €1.2 million in unpaid stamp duty, penalties and interest charges was due in 109 cases.
The report says that a random sample of 1,000 cases out of 5,500 in the Dublin area which were deemed to be at risk of abuse were selected for examination. Revenue wrote to each purchaser requesting information on all property owned within the previous five years and conducted 102 visits to specific addresses.
Of the 109 cases identified, 94 involved clawback because a property had been rented within five years of purchase, while in 15 cases property investors were found to have incorrectly claimed full or partial relief. These individuals would own more than one property.
As part of the Revenue's plans, each of its four regional divisions in the Border, midlands and west region, the east and southeast, the southwest and Dublin, will be asked to select transactions which they deem merit further examination.
A "master list" of transactions considered to be open to abuse has already been circulated to these offices. Typical triggers for inclusion on this list include cases in which the individual in question has supplied a different address on their application for stamp duty relief to that which appear on Revenue records.
Letters are being issued to these individuals asking them to clarify their position.
Typical levels of stamp duty relief for owner-occupiers vary. Stamp duty, which is calculated as a percentage of the cost of purchasing the property, can be as high as 9 per cent of the price.
Stamp duty for first-time buyers was abolished for purchases after March 31st.