Revenue Note for Guidance
Section 37 Exchanges
This section provides that where an exchange of immovable property (i.e. land and buildings) is effected duty will be charged on the value of that property. This applies in cases where immovable property is exchanged for other immovable property or any property. It also applies where some consideration was paid e.g. where the properties were of unequal value. Where immovable property situated in the State is exchanged for foreign property, immovable or otherwise, duty is payable on the value of the Irish immovable property only.
The following examples illustrate the operation of the section.
Example 1
In 2011 A exchanges his house worth €190,000 for B’s farm worth €150,000, both situated in the State. B pays A €40,000 equality money. One deed of exchange is executed. Duty on that deed is €4,900 calculated as follows:
Property |
Chargeable Consideration |
Rate |
Duty Payable |
A’s House |
€190,000 |
1% |
€ 1,900 |
B’s Farm |
€150,000* |
2% |
€ 3,000 |
€4,900 |
*the equality money is ignored.
If the exchange had been completed by means of separate deeds of transfer (one in consideration of the other), each deed would be liable to duty based on the value of the property therein conveyed i.e.
Property |
Chargeable Consideration |
Rate |
Duty Payable |
Deed (A to B) |
€190,000 |
1% |
€ 1,900 |
Deed (B to A) |
€150,000* |
2% |
€ 3,000 |
€4,900 |
*the equality money is ignored.
Example 2
In 2011 A transfers her house worth €190,000 to B in exchange for B’s yacht worth €100,000 and €90,000 equality money. A deed of transfer of the house is executed. Ownership of the yacht passes by delivery. The duty on the deed of transfer is €1,900 (€190,000 × 1%) as the property is residential.
Relevant Date: Finance Act 2014