After the handsome returns which have been generated from the Irish commercial property market in the relevant recent past, the transactional activity in the market has been slow this year, (the number of commercial property deals this year is about 20% of what it was in 2007). The main cause has been the difficulty of potential buyers in securing debt financing.

From a tax viewpoint the recent reduction in stamp duty from 9% to 6% is balanced by the increase in capital gains tax rates by 2% to 22%. These measures will not stimulate the market of themselves. Hopefully a reduction in interest rates combined with increased stability in the debt markets and availability of credit should stimulate activity in this sector. However, it will still be a difficult market.

Investors will now be seeking to limit exposures by focussing on disposals, reorganising their structures to minimise costs, generate cash and potentially boost balance sheets where possible to show strength where needed.

All such transactions will have a stamp duty and VAT consequence and potentially capital gains tax will need to be addressed. We can assist our clients to minimise the tax impact of their strategies for maximising value from property portfolios and help them to put in place strategies to reorganise their portfolio and to dispose of property tax efficiently, to raise finance, and reduce property costs.

For further information please contact:

Padraic Whelan
Partner
Phone: +353 1 4172848