Revenue officials have backed down on plans to withdraw stamp duty relief from thousands of first-time home buyers, writes Dominic Coyle
The Revenue sparked a storm of protest when it stated that first-time buyers of second-hand properties would have to pay stamp duty if their parents were named on lending documents.
The ruling left thousands of cash-strapped young homeowners facing tax bills of up to €15,850.
The Revenue said last night it was now prepared to accept, under certain circumstances, that a first-time buyer should be allowed retain their stamp duty relief even though a parent or someone else was named on loan documents.
As long as the house is retained solely in the name of the first-time buyer, and that no other parties to the lending documents intend to take a "beneficial interest" in the property, no stamp duty will now be levied.
The involvement of the parent on the loan, however, must be at the request of the lender for the purpose of providing additional security on the loan.
Repayments on the loan must also be made by the first-time buyer, not any other party on the loan.
In those circumstances, the Revenue says, it will treat the parent as acting "effectively in the role of guarantor for the loan" - retaining eligibility to stamp duty relief.
The Revenue also said it would not seek to claw back stamp duty relief from existing home owners, who bought second-hand property under new stamp duty exemption rules since December, as long as they met the criteria.
The compromise came as Matheson Ormsby Prentice said it had "significant doubts as to the validity in law" of the Revenue guidance. The legal firm said the Revenue position that all borrowings must be provided by the first-time buyer was not in the relevant statute.