Written Questions. - Stamp Duty.
Noel Ahern
Question:
44
Mr. N. Ahern
asked the
Minister for Finance
the movements over recent years in the threshold bands of stamp duty in view of many complaints regarding the levels of 5 per cent and 6 per cent on very standard houses; if the alterations in the thresholds have kept pace with the rise in property values; if he will consider a substantial alteration in the current scheme; and if he will make a statement on the matter.
[17586/95]
The rates of stamp duty on property depend on the amount or value of the consideration for the property, as follows:
|
£
|
%
|
|
0-5,000
|
not liable
|
|
5,001-10,000
|
1
|
|
10,001-15,000
|
2
|
|
15,001-25,000
|
3
|
|
25,001-50,000
|
4
|
|
50,001-60,000
|
5
|
|
60,001 and over
|
6
|
The present bands have largely obtained since 1975, except for the introduction of the 5 per cent band in 1988 and a readjustment of the lower bands in 1990.
I should point out that there are a number of significant reliefs and exemptions within the stamp duty code which are primarily aimed at assisting first-time house buyers to purchase their own homes. There is a full exemption from stamp duty for transfers of new houses with a floor area below 125 square metres. Transfers of new houses with a larger floor area attract stamp duty based only on the site value, subject to a minimum site value of one-quarter of the full house value. The targeting of these stamp duty reliefs in favour of new houses takes account,inter alia, of the fact that most new house sales are subject to VAT at 12.5 per cent, whereas sales of second-hand houses generally are not.
I should add that there is also 100 per cent mortgage-interest tax relief for first-time buyers of both new and second-hand houses and a reduced rate of relief for other mortgage holders. A generous £3,000 new house grant is also available for first-time buyers.
These reliefs help to moderate the cost of housing generally and also play an important role in promoting employment within the construction sector.
In framing taxation policy, the Government must have regard to both the budgetary implications of changes to the tax code, and the possible effects of such changes on other aspects of Government policy. The yield from stamp duty on all property, including second-hand houses, is estimated at £160 million this year and makes a very significant contribution towards the cost of implementing the Government's important social and economic programme.
Accordingly, I have no plans to alter the current scheme.
