Iceland May Allow Exemptions From Stamp Duty

by Robert Lee, Tax-News.com, London

19 November 2008

Iceland's Minister of Finance, Arni M. Mathiesen, has presented a bill for an amendment to the Stamp Duty Act to assist people in payment difficulties as a result of the rise in mortgage loans that in turn is attributable to the decline in the exchange rate and the increase in inflation.

The bill proposes a temporary amendment to the Act, providing for an exemption from stamp duty, on one hand when repayments of mortgage loans by individuals are rescheduled and on the other when new mortgage loans are issued due to arrears on older mortgage loans to individuals. Such rescheduling generally takes place through a rescheduling of payments on the original mortgage loan or through the issue of an addition to the original loan. In both cases, the exemption from the stamp duty is subject to the condition that both the lender and the borrower on the new or rescheduled loan are the same as on the original loan. This can apply both to the original lender and borrower as well as to those to whom the obligations of the original parties have been transferred to. The new documents must also be issued with a clear reference to the original mortgage document.

The amendment is not expected to lead to outright expenditure by the Treasury, but revenue from the stamp duty is expected to decline somewhat. The fiscal budget for the current year does not incorporate a revenue loss on account of this amendment in current circumstances.

Recommended