The current 7.5% stamp duty is crippling the sale of farmland and small commercial premises, the Institute of Professional Auctioneers and Valuers (IPAV) said in its pre-Budget submission.

A new tiered system of stamp duty should be introduced, it said. It proposes that sales of such properties with a value of €500,000 or less would be charged at 1%, in line with the residential stamp duty rate.

Farmland and commercial properties valued between €500,000 and €1m would attract a rate of 3%, rising to 5% for those over €1m, and the full 7.5% if over €2m.

“The 7.5% rate is having a detrimental impact on land sales and sale of small commercial properties,” chief executive of IPAV Pat Davitt said. “It adds €7,500 to every €100,000 and is proving a real disincentive. A tiered system is essential to create movement in this market.”

There is a good supply of properties for prices much lower than that of new homes, typically at prices of between €170,000 and €250,000, especially in rural areas

It would also encourage conversion of empty, unused shops into homes to in turn encourage young people back into towns and villages, he added.

The submission also calls for the Help-To-Buy (HTB) scheme to be extended to include second-hand homes. “There is a good supply of properties for prices much lower than that of new homes, typically at prices of between €170,000 and €250,000, especially in rural areas. New homes, even in rural Ireland, priced between €250,000 and €300,000 are already too expensive for young people on an average wage of €40,000 to €50,000.”

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