New build or second hand: what the Property Price Register shows

Every row on the register says whether the dwelling was newly built or previously occupied, and that single marker changes what the price beside it means. A second hand row shows what the buyer paid. A new build row shows what the buyer paid minus the value added tax, because stamp duty on a new home is charged on the price before VAT and the register is assembled from stamp duty filings. Read the two columns as if they were the same measurement and every conclusion you draw about a developing area will be wrong.

The field that changes everything

New residential property in Ireland carries value added tax at 13.5 per cent. It is charged on the sale of the dwelling by the developer, it is included in the price quoted in the brochure, and the buyer pays it as part of the purchase. It does not apply to a second hand home, which is why an established house and a new one two fields away are taxed on entirely different bases.

Because the register only ever sees the stamp duty consideration, it only ever sees the pre VAT figure for the new house. Nobody is hiding anything and no discount was given. The file is faithfully reporting a number that was calculated for a tax purpose, and that number is smaller than the one on the contract the buyer signed.

The arithmetic, done properly

Here is the part that trips up careful people. The relationship between the two figures is multiplicative, not additive, so it does not work symmetrically. To go from a register figure to the amount paid, multiply by 1.135. To go from an amount paid to a register figure, divide by 1.135. Subtracting 13.5 per cent from a gross price does not return you to the register figure, and adding it back does not undo the subtraction.

One consequence is worth stating in the other direction. Expressed as a share of what the buyer actually paid, the register figure sits roughly twelve per cent below it, not 13.5 per cent, because the tax is a percentage of the smaller number rather than of the larger one. If you have been quoting a 13.5 per cent gap between the register and the contract, you have been slightly overstating it every time.

Why the tax works this way

Stamp duty is charged on the consideration for the property. Where a sale carries VAT, charging duty on the VAT inclusive figure would mean paying one tax on top of another, so the duty is calculated on the price excluding it. That treatment is sensible in its own terms and has the side effect of making the public price record inconsistent between new and second hand homes, which nobody set out to do and nobody has any particular reason to fix.

It also means the register understates the total value of new build activity in the State, since every new dwelling in it is recorded at roughly eighty eight per cent of the money that changed hands. Anyone adding up register totals to describe the size of the market needs to say which side of the tax they are counting on. The wider mechanics of the duty are set out in stamp duty in Ireland.

What a new build row still hides

• Timing. A new home bought off plan can be contracted at one stage of a scheme and closed a year or more later, so the price on a recent row may reflect a market that has since moved on.
• Incentives. Furniture packs, appliance allowances, paid legal fees, flooring and landscaping thrown in by a developer do not appear anywhere, and they change what the money bought.
• Phase pricing. Developers commonly raise prices between phases, so two rows a few months apart in the same scheme can differ because of the developer schedule rather than because of the market.
• Buyer support schemes. Help to Buy and similar arrangements affect what a purchaser has to find, not the consideration filed with Revenue, so they leave no trace on the row.
• The unit itself. There is no floor area, no aspect, no floor level and no parking allocation in the file, so identical prices in one block can describe very different apartments.

Second hand rows have their own quirks

It would be neat if second hand rows were simply the honest half of the file, and they are close to it, but not quite. A second hand price includes whatever was agreed for fitted items and excludes whatever was paid separately for contents, and the line between the two is drawn by the parties rather than by any rule you can see. A house sold with a right of residence for an elderly relative, or with a site excluded from the sale, will read low without saying so.

There is also a definitional edge worth knowing. A building substantially reconstructed or converted can be treated as new for tax purposes even though it has stood on the road for a century, so an occasional row marked as a new dwelling will belong to a period building. If a new marker appears on an address that plainly predates the scheme around it, a conversion is the likeliest explanation.

Comparing new with second hand

1. Separate the rows by the new or second hand marker before doing anything else.
2. Gross up every new build figure by multiplying it by 1.135 so that both sets describe money paid.
3. Bring in floor areas from the building energy rating certificate or the original listing, because a new apartment and a 1970s house are rarely the same size.
4. Set a like for like standard: a new home is finished and rated, so a tired second hand house at the same price per square metre is not the same proposition.
5. Check the pattern for the area on our Irish sold price pages rather than reasoning from two rows.
6. Where an outlier survives all of that, work through the other explanations in why register figures look odd.

Do that honestly and you can answer the question buyers actually care about in a new suburb: whether the premium for a new, warm, guaranteed home over an older one nearby is worth what it costs. That is a real question with a local answer. It just cannot be answered from raw register figures, because half of them are measured before tax and half are not.

Sources: how VAT and stamp duty apply to new residential property is set out by the Revenue Commissioners. The transaction data is from the Residential Property Price Register, published weekly by the PSRA from those returns and covering sales since 2010.