CBRE Say Commercial Property Stamp Duty Change Will Impact Property Values And May Deter Investors
Dublin, 8th October 2019 - Commercial property consultants CBRE Ireland have reacted negatively to the Irish Government’s decision to increase the rate of stamp duty on commercial property transactions in Budget 2020, which they see as having a direct impact on pension funds and the many institutional buyers who have been key to the recovery of the Irish commercial property market over recent years. The rate of stamp duty on non-residential property transactions is set to rise to 7.5% from 6% as of midnight tonight, having been trebled by Government from 2% to 6% only two years ago.
CBRE say that the increased cost of commercial stamp duty will:
impact negatively on commercial property values & in turn on the value of pensions
potentially deter international investors
We welcome the fact that sense has prevailed regarding retention of the Help-to-Buy scheme for a further two years, being that this scheme has been instrumental in helping deliver much-needed housing supply in recent years. We also broadly welcome the allocation of increased funding in today’s Budget towards the delivery of both social and affordable housing. However, the commercial property sector is disappointed that the rate of stamp duty on non-residential property transactions has been increased yet again. Over the last number of years, the Irish commercial real estate market has become professionalised with more than half of all investment now emanating from overseas investors and institutional buyers as opposed to being a domestic debt-funded market as we were when the market crashed previously. This has created a much more stable market. Unexpectedly increasing transaction costs is clearly unwelcome considering the reputational damage such changes make for institutional investors who already bore a trebling of this rate only two years ago. This increase in stamp duty will certainly have a bearing on investors decision-making, not least the price they will bid and pay for commercial real estate assets from this point forward.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2018 revenue). The company has more than 90,000 employees (excluding affiliates) and serves real estate investors and occupiers through more than 480 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.
CBRE U.C., (CBRE Ireland) registered in Ireland, no. 316570. PSRA Licence No. 001528 is the country’s largest commercial real estate services company with offices in Dublin and Cork. Currently employing over 150 employees, we work with occupiers, investors and developers of office, industrial and logistics, retail, hotel and healthcare property, providing strategic advice and execution for property sales and leasing; tenant representation, corporate services; property and project management; appraisal and valuation; development services; investment management and debt advisory; business rates and compulsory purchase and research and consulting. Please visit our website at www.cbre.ie