Where no compensation (owelty) is paid, the partition is not taxable.

It will be considered that no compensation has been made if the value of the shares is equal to the value of the assets assigned to each co-partitioner. In this case, if you and your brother inherited half share each, and the two properties have the same value, no tax is to be paid.

Let us say that the value of the property at the time of inheritance was €40,000. Therefore each one of you inherited €20,000. Today the value of the property is €60,000, so your share is €30,000 each. Therefore the compensation due to you is €30,000 which is not going to be paid out of the common property or other assets.

It is considered that in the partition you have transferred half of the house to your brother. If the house was inherited after 24 November 1992, you have to pay tax on the transfer value of half of the house less the value of half of the inheritance, i.e. 12% on (€30,000 - €20,000) = €1,200.

When any compensation is involved it is recommended that you seek professional advice because very often the relevant calculations are quite complicated. For more details about the tax on transfers involving an owelty, see the Tax on Property Transfers Rules, 2006.