A young lady buys a house to live in it, but agrees that the sellers can stay in it for another two years. The sellers also pay the expenses until the legal transfer. The question is whether the reduced transfer tax rate of 2% for acquisition of a house applies on the transfer. The reduction in this case is €26,400. How does the court rule?
The question is whether the legal condition that the acquired property must serve as a principal residence other than temporarily should be interpreted to mean that the permanent habitation must, in any case, begin within a short period of time after acquisition. There is no time provision in the section of the law and the young lady is not an investor, but a natural person who started living in the property after acquisition, albeit after 24 months. The young lady has not sold or rented the property since then, but has occupied it. For her, the property is a dream home, close to her parents' home, near facilities and suitable for raising a family.
The court has no doubt that the home was intended to be her permanent principal residence.
The fact that the State Secretary of Finance does impose conditions in a number of policy decisions regarding the period within which the taxpayer must move into his home is immaterial. To the extent that these decisions limit the statutory scope of the reduced rate, they were taken outside the power vested in the secretary of state.
Judge's ruling
The judge ruled that the young lady was right. She does not have to pay the €26,400.
Note: Again, it is notable that the Inland Revenue apparently does not grant private home buyers the reduced transfer tax rate of 2%. With all sorts of arguments, attempts are being made in the courts, again in vain, to have the lower rate disapplied.
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