First-Time Buyer Tax Essentials: Part 2 – Taxes on the Purchase of Property

Buying your first home in Ireland is an exciting step, but it comes with important financial responsibilities—including understanding the taxes you’ll encounter at the point of purchase. In this second article in our series, we break down the two most significant taxes first-time buyers should be aware of when buying a property: Stamp Duty and Value-Added Tax (VAT).

We also clarify the official definition of a first-time buyer, as this status plays a central role in determining eligibility for various government supports and reliefs (covered in Part 3).

Stamp Duty: The Property Transfer Tax

Stamp Duty is a tax you must pay when you buy property or land in Ireland. It is charged on the transfer documents (such as the deed of transfer) that give effect to the sale.

Current Rates (Residential Property – 2025)

As of 2025, the Stamp Duty rates applicable to residential property are:

• 1% of the purchase price for properties valued up to €1 million
• 2% on any portion of the price above €1 million

These rates apply to the purchase price excluding VAT.

Example:
If you purchase a home for €350,000, the Stamp Duty is calculated as follows:

• 1% of €350,000 = €3,500

If you were purchasing a home for €1.2 million:

• 1% on the first €1,000,000 = €10,000
• 2% on the remaining €200,000 = €4,000
• Total Stamp Duty = €14,000

When Is Stamp Duty Paid?

Stamp Duty is usually paid shortly after the sale closes and before the title can be registered. Your solicitor typically handles the filing and payment with Revenue through the eStamping system. It must be paid within 30 days of the date the instrument (legal document) is executed to avoid penalties.

Are First-Time Buyers Exempt?

Unlike some countries, Ireland does not provide a specific exemption from Stamp Duty for first-time buyers. All residential property buyers—whether first-time or otherwise—are subject to the same Stamp Duty rates.

However, first-time buyers may still benefit from other financial supports (like the Help to Buy scheme), which we’ll discuss in detail in the next article.

VAT (Value-Added Tax): When It Applies to Property Purchases

While second-hand homes are generally exempt from VAT, newly built homes may be subject to VAT. This can be a significant factor in the overall cost of buying your home.

When Does VAT Apply?

• New Builds: VAT is typically included in the sale price of new residential properties sold by developers or builders. The standard VAT rate on these sales is 13.5%.
• Second-Hand Homes: These are usually exempt from VAT. You won’t need to pay VAT separately or as part of the price.

Understanding VAT in Pricing

In most new developments, the price advertised by the developer already includes VAT. For example, if a new home is listed at €400,000, the price may already reflect the VAT-inclusive cost.

It is still important to confirm this with the seller or your solicitor to ensure there are no surprises.

Who Qualifies as a First-Time Buyer?

Your first-time buyer status matters—not for Stamp Duty—but because it impacts eligibility for government schemes like Help to Buy and First Home Scheme.

The official definition, as used by both Revenue and lenders, is that a first-time buyer is someone who:

• Has never previously purchased or built a residential property in Ireland or abroad
• Has never previously borrowed under a mortgage for the purchase of a residential property
• Is purchasing the property as their main residence

If you’ve ever owned or co-owned a property, even if it was an inheritance or a buy-to-let, you generally do not qualify as a first-time buyer.

Additional Considerations

Legal and Professional Fees

While not taxes per se, you should also account for legal fees, land registry fees, and surveyor costs when budgeting for your home purchase. These are not taxable in themselves but are part of your overall cost and should be planned for early on.

Mixed-Use or Investment Properties

If you're purchasing a property with both residential and commercial elements (e.g. a shop with a flat above), non-residential Stamp Duty rates may apply to part of the purchase. These are currently 7.5% (as of 2025). Similarly, VAT may be recoverable or chargeable differently depending on the structure of the sale and intended use.

Coming Up Next

In Part 3 of this series, we will focus on Tax Reliefs and Government Schemes for first-time buyers. We’ll explain how to apply for the Help to Buy incentive, the First Home Scheme, and other supports that can significantly reduce your upfront costs—or even provide cash refunds.

Check out part one of the series here in case you missed it.

Feel free to contact us if you have any questions!