Dwelling House Relief

Capital Acquisitions Tax (CAT) is a tax on gifts and inheritances received by individuals.
The amount of CAT payable depends on the relationship between the parties, and there
are three group thresholds in Irelands broken down by these relationships.
There are a number of reliefs available for CAT, including Dwelling House Relief.
Dwelling House Relief allows for a complete exemption from CAT for beneficiaries
inheriting the dwelling house they occupy as their main residence from a deceased’s
estate.

This exemption can only be used for inheritances, unless a property is gifted to a dependant relative as a gift where the conditions are met. There are strict requirements which need to be met in order to qualify for this relief, including the following:

• A dwelling is considered any building or part of a building suitable for use as a
  dwelling and includes grounds of up of to one acre (0.4047 hectares).
• The dwelling must have been occupied by the deceased as their main resident at
  the date of their death, unless the deceased was residing elsewhere due to illness
  or the beneficiary is a dependant relative, i.e. over the age of 65 or permanently
  incapacitated and unable to maintain themselves.
• The beneficiary must have occupied the dwelling continuously as their only main
  residence for a period of at least three years prior to the date of the inheritance.
• The beneficiary cannot be beneficially entitled to an interest in another property
  anywhere in the world at the date of the inheritance. This includes the beneficiary
  simultaneously inheriting another property in the deceased’s estate, as well as
  partially constructed dwellings.

The beneficiary must retain ownership of the dwelling house and continue to occupy the
property as their main resident for six years from the date of the inheritance.
If the beneficiary does not meet these conditions for at least six years, the exemption
claimed is entitled to be ‘clawed back’ by the Revenue and therefore, the beneficiary
would be liable for the full CAT amount.

* In contentious business, a Solicitor may not calculate fees or other charges as a
percentage or proportion of any award or settlement.
** This information is for guidance purposes only. It does not constitute legal or
professional advice. Professional or legal advice should be obtained before taking or
refraining from any action as a result of the contents of this publication. No liability is
accepted by McElhinney & Associates for any action taken in reliance on the information
contained herein. Any and all information is subject to change.