Thousands of tenants in Dublin face an unwelcome extra bill this year as spiralling rents tip them above the €2,500-a-month level at which a little-known 1 per cent stamp duty applies.
Some 55 per cent of three-bedroom Dublin city family homes currently up for rent through online property firm Daft.ie are quoting above the threshold, according to an analysis by Goodbody Stockbrokers. A third of apartments in the capital are in the same territory.
The €30,000-a-year level at which the duty kicks in was set in 2008, when it was raised from €19,050. This served to remove liability from most tenants during the financial crash.
Market rents in Dublin in the first quarter were 66 per cent above their lowest point during the crisis, having surged 14 per cent year-on-year, according to Daft.ie, even as a 4 per cent cap on annual increases came into effect in late 2016 for certain hot rental areas.
"In Dublin, families and those sharing accommodation are increasingly being charged rents that now exceed the stamp duty threshold," said Colm Lauder, a property analyst with Goodbody Stockbrokers.
“This means that they have to pay at least another €300 or more to cover their annual rent costs, on top of already paying record rents in many parts.”
Minister for Finance Paschal Donohoe said in response to a parliamentary question from Social Democrats TD Catherine Murphy that the duty raised just €150,000 last year with 238 taxpayers declaring liability. That was up from €90,000 for the previous year and €50,000 for 2013.
"It's not a tax that's well-known at all," said Philip O'Sullivan, an economist with Investec in Dublin.
“There are an awful lot of ordinary dwellings that are now caught. I don’t think it was ever designed to affect the mass market, so I imagine that policymakers will look at revising the threshold in the next finance Bill.”