Finance Bill closes potential loophole in levy on bulk buying of houses

Non-resident corporate landlords with presence in State to pay 25% tax

The Government has moved in Finance Bill 2021 to close off a potential loophole in laws introduced during the summer to impose a 10 per cent stamp duty on bulk buyers of 10 or more houses within a one-year period.

The Bill, published on Thursday, seeks to insert a clarification into law that the stamp duty also applies to the “indirect” acquisition of a house by way of, for example, the purchase of shares in a company that owns a property.

It also reinforces the fact that apartments are outside the scope of the higher charge, which is nine percentage points higher than the normal 1 per cent residential transaction stamp duty.

The Department of Finance said in a note accompanying the publication that none of the technical amendments "change the substance or purpose of the legislation underpinning the 10 per cent charge".


This was introduced, initially by way of a Government financial resolution in May, after a public backlash over investment funds beginning to move into commuter towns to snap up houses in bulk in new estates.

Meanwhile, the Bill looks to amend the current situation where non-resident corporate landlords that do have a branch or agency in the State currently are only taxed at the standard 20 per cent income tax rate. From January they face the higher 25 per cent corporation tax that Irish companies face on Irish rental income.

Minister for Finance Paschal Donohoe has also used the Bill to tighten up the language around laws aimed at preventing cases where tax deductible interest expenses are created within a group fundamentally to avoid tax, with little or no commercial rationale.

It highlights that the anti-avoidance provision also includes so-called promissory notes “and any other agreement or arrangement having a similar effect”.


Elsewhere, the Bill introduces a technical tweak to the Taxes Consolidation Act 1997, to confirm that mergers by absorption – where a company is dissolved without going into liquidation and its assets are transferred to its parent company – do not give rise to taxable gains.

Second stage scrutiny of the Bill is expected to begin in the Dáil from November 2nd.

The Government also decided that the Finance Bill should complete its passage through the Oireachtas by December 31st each year. This means that as this Finance Bill is published in 2021 it is called Finance Bill 2021 even though it relates to Budget 2022.

Joe Brennan

Joe Brennan

Joe Brennan is Markets Correspondent of The Irish Times