A Revenue clampdown on abuse of owner-occupier stamp duty relief is set to continue, with individuals who rented out properties before last Wednesday's Budget still subject to the five-year claw-back rule, it has emerged.
In his Budget speech, Minister for Finance Brian Cowen announced that the limit in the rule - which requires a full claw-back of stamp duty exemption where an owner-occupier moves out and lets their property within five years - would be reduced to two years.
However, a Revenue spokesman has confirmed that the changes only apply to houses or apartments rented out since Budget day and will not be backdated.
As a result, an individual who rented out a property last Tuesday - just one day before Mr Cowen's speech - would still find themselves liable under the five-year claw-back rule, rather than the new two-year rule.
Revenue, which recently decided to extend nationally a pilot project that examined abuse of this relief, would also be continuing with this audit, he added. Revenue's ongoing stamp duty audit is currently focused on 2005.
The changes announced by Mr Cowen mean individuals who are in their third year of ownership and who rent out their house or apartment since last Wednesday will no longer have to repay any owner-occupier stamp duty relief that they received.
While the reduction from five to two years is expected to significantly lessen the risk to the exchequer of stamp duty relief abuse for properties rented out since Wednesday's announcement, it is understood Revenue may decide to extend its current audit to include other years.
A Revenue pilot project in Dublin had previously found that more than one in 10 of those scrutinised had either incorrectly claimed relief or had rented out their properties within five years, without paying this relief back as required under previous rules.
The average amount assessed as owing in each of these cases was approximately €11,000, representing a total of €1.2 million.
Announcing the changes in his Budget speech, Mr Cowen said the move to a two-year rule would allow for the retention of "an important control in the system".
It would also better reflect "the increased career and residential mobility of our population, and will give potential young house buyers greater flexibility and certainty in their choices", he said.
The total cost of these changes is estimated at €4 million in 2008.