Dáil Éireann debate -
Wednesday, 8 Nov 2000

Vol. 525 No. 3

Written Answers. - Tax Reliefs.

Gay Mitchell

Question:

195 Mr. G. Mitchell asked the Minister for Finance if he will introduce new provisions to allow for at least half of the purchase to be regarded as falling within the provisions for tax relief in the circumstances of a person (details supplied) in Dublin 12 in relation to first time buyer relief. [25181/00]

Minister for Finance (Mr. McCreevy)

In the Finance (No. 2) Act, 2000, I reduced the stamp duty rates on transfers of residential property at the lower end of the market for owner-occupiers and first time buyers. The following tables show the new rate structure compared to the previous rates.

Table I

Previous Rate Structure applying prior to Finance (No. 2) Act, 2000

Value	Rate%
Up to £60,000	Exempt
£60,001 to £100,000	3
£100,001 to £170,000	4
£170,001 to £250,000	5
£250,001 to £500,000	7
Over £500,000	9

Table II

Current Rate Structure introduced in Finance (No. 2) Act, 2000

First Time Buyers			Other Owner-Occupiers
Value	Rate%	Value	Rate%
Up to £150,000	Exempt	Up to £100,000	Exempt
£150,001 to £200,000	3	£100,001 to £150,000	3
£200,001 to £250,000	3.75	£150,001 to £200,000	4
£250,001 to £300,000	4.5	£200,001 to £250,000	5
£300,001 to £500,000	7.5	£250,001 to £300,000	6
Over £500,000	9	£300,001 to £500,000	7.5
		Over £500,000	9

The purpose behind the first time buyer relief for the purchase of a house is to help individuals make the first entry into an already difficult housing market. Consequently, where a person has previously been able to purchase a house, either jointly or individually, one is not entitled to this relief. It follows that where such a person purchases a house jointly with a first time buyer, the relief cannot be claimed as the house is not being bought entirely by first time buyers. The point should also be made that where a previous house owner combines with a first time buyer to purchase a house, this would often confer a financial advantage over first time buyers, if the previous house owner was using the proceeds of a house sale.

However, as table II above shows, owner-occupiers who are not first-time buyers also benefit generally from the revised stamp duty rates at the lower end of the market. In addition, there is no stamp duty on the sale of new residential property where the purchaser is an owner-occupier and the house is not greater than 125 square metres. If a new house in such cases is more than 125 square metres, stamp duty is charged on the site value only, subject to a minimum site value of one quarter of the full house value. I have no plans to introduce new provisions to the stamp duty legislation as proposed by the Deputy.