It is a situation that may tempt some into tax evasion. Once having taken a tenant, not only will they be tempted not to pay the additional stamp duty, but from fear of losing their stamp duty relief, may be tempted not to report the rental income. Too great a temptation should not be placed in front of vulnerable people. Most people spend their entire lives living in the same house. To move house is very expensive, mainly by reason of the stamp duty costs involved.
Stamp duty is an obstacle both to trading up and to trading down.
It is an obstacle to labour mobility within the economy. We have seen in the case of other taxes that reduction of rates leads to increased economic activity and increased tax yield. 2000 by KPMG Ireland. All rights reserved.