By Padraic Halpin
DUBLIN: Non-resident investors in Irish real estate funds will have to pay a 20 percent withholding tax from next year, the finance ministry said on Thursday, in a further clamp down on structures used to minimise tax bills on property transactions.
Ireland last month proposed to amend tax laws for so-called “Section 110” special purpose vehicles and widened the net on Thursday to include all funds where 25 percent of their value is made up of Irish real estate assets.
Such a change targets two other popular types of funds used by foreign investors to buy up swathes of Irish property in recent years: Irish Collective Asset-management Vehicles (ICAVs) and Qualifying Investor Alternative Investment Funds (QIAIFs).
The new withholding tax will not apply to certain categories of investors such as pension funds, life assurance companies and other collective investment undertakings, the finance ministry said in a statement.
Analysts at Goodbody Stockbrokers said uncertainty around the legislation that governs QIAIF’s and ICAV’s had delayed well in excess of 100 million euros worth of deals in the run up to last week’s budget. Non-Irish investors are responsible for 71 percent of property sales so far in 2016, they said.
(Editing by Alexandra Hudson)
Source: Reuters