What Taxes Should You Know About When Buying or Selling a Home?
Buying or selling a home is a big step and, for many people, one of the most important financial decisions they will ever make. Alongside contracts and closing dates, it is also important to understand the tax side of things. Knowing what taxes may apply—and when—can help you feel more in control and avoid surprises along the way.
Capital Gains Tax (CGT)
Capital Gains Tax may apply if you sell a property for more than you paid for it. In Ireland, CGT is currently charged at 33% on the profit you make.
The “gain” is worked out by taking the sale price and deducting what you originally paid for the property, along with certain allowable costs. These can include legal fees, stamp duty paid when you bought the property, and the cost of qualifying improvements. Your accountant can help you identify which costs can be claimed.
Everyone is entitled to an annual CGT exemption of €1,270, which can be used in the year the property is sold to reduce the amount of tax payable.
The good news is that if the property is your principal private residence—in other words, your main home—you will usually not have to pay CGT at all. That said, the exemption can be affected if the property was rented out for a period, left vacant, or partly used for business, so it is always worth checking your individual position.
Stamp Duty
Stamp duty is a tax paid by the buyer when purchasing property and must usually be paid within 30 days of closing.
For residential property in Ireland, the current rates are:
- 1% on the purchase price up to €1 million
- 2% on any amount over €1 million up to €1.5 Million
- 6% on any amount over €1.5 Million
Stamp duty applies whether or not you are a first-time buyer, although there may be other supports available in certain cases, such as the Help to Buy scheme.
If you are buying non-residential property, stamp duty is currently charged at 7.5%. It is also important to be aware that where a house is bought with more than one acre of land, any land over one acre is treated as non-residential for stamp duty purposes.
Local Property Tax (LPT)
Once you own a home, you will also need to pay Local Property Tax (LPT) each year. LPT is based on the market value of your property and falls into valuation bands set by Revenue.
When selling a property, the LPT must be fully paid for the year of sale. The buyer then reimburses the seller for the portion of the year after the sale date when the transaction is completed.
If a sale closes after 1 November, the seller is also required to pay the following year’s LPT in advance. As with the current year’s tax, this amount is adjusted between buyer and seller on closing.
How We Can Help
Every property transaction is different, and tax obligations can vary depending on your personal circumstances. Getting legal advice early can help identify any potential tax issues, confirm whether exemptions or reliefs apply, and make sure everything is dealt with properly and on time.
We regularly help clients navigate the legal and tax aspects of buying and selling property in Ireland. If you are thinking about a move or an investment and would like clear, practical advice, we would be happy to guide you through the process from start to finish.
Useful Resources
Internal Articles & Resources:
The Family Farm and “Proper Provision” in Irish Divorce Law
Faster Deeds, Less Red Tape: Conveyancing Reforms on the Way
Selling the Family Home After Divorce in Ireland
External Resources
For further independent information on property taxes in Ireland, the following resources may be helpful:
- Revenue – Capital Gains Tax
https://www.revenue.ie/en/gains-gifts-and-inheritance/capital-gains-tax/index.aspx - Revenue – Stamp Duty on Property
https://www.revenue.ie/en/property/stamp-duty/index.aspx - Revenue – Local Property Tax (LPT)
https://www.revenue.ie/en/property/local-property-tax/index.aspx
These sources provide up-to-date guidance directly from Revenue and Citizens Information, and are a useful starting point when researching your own position.
This article is for general information purposes only and does not constitute legal or tax advice.
