Written Answers. - Stamp Duty.

Enda Kenny

Question:

275 Mr. Kenny asked the Minister for Finance the position regarding stamp duty on second-hand houses; the rate at which this is applicable; the plans he has to abolish this rate of tax; and if he will make a statement on the matter. [7629/01]

In the Finance (No. 2) Act, 2000, I made significant changes to the stamp duty regime on transfers of second-hand residential property arising from the recommendations of the third Bacon report into the housing market. The Act introduced a three-tiered stamp duty structure for first-time buyers, owner-occupiers other than first-time buyers and investors. I increased the exemption from stamp duty from £60,000 to £150,000 in the case of first-time buyers and for other owner-occupiers to £100,000 and reduced the stamp duty rates on transfers of residential property at the lower end of the market for first-time buyers and other owner-occupiers in excess of these thresholds. In particular, the revised regime is structured to facilitate those who are trying to buy their first home and who are faced with particular difficulties in the market. Many first time owner-occupier buyers are now either exempt from stamp duty or pay at a reduced rate. However, owner-occupiers who are not first-time buyers also benefit generally from the revised stamp duty rates.

The Act also introduced a flat 9% stamp duty rate on all categories of investors buying new or second-hand residential property. In the light of developments in the housing market since last year, the Government decided to reduce the rate of stamp duty for investors in new property from this flat 9% and an amendment to this effect was introduced on Committee Stage of the Finance Bill, 2001, which applies to conveyances made on and from 27 February 2001. However, the investor rate for second-hand properties will remain at 9%. This change to the stamp duty regime will leave the investor rate unchanged in the second-hand market while reducing it somewhat for new property, thus providing a supply incentive in this area. Limiting the concession to new housing maintains the relative advantage of first-time purchasers in the second-hand market which accounts for two-thirds of first-time purchaser transactions.
The following table outlines the stamp duty rates now applying to purchases of second-hand houses.

First Time Purchaser

£

Rate

Other Owner Occupier

£

Rate

Investor

£

Rate

0 to 150,000

0%

0 to 100,000

0%

0 to 100,000

9%

150,001 to 200,000

3%

100,001 to 150,000

3%

100,001 to 150,000

9%

200,001 to 250,000

3.75%

150,001 to 200,000

4%

150,001 to 200,000

9%

250,001 to 300,000

4.5%

200,001 to 250,000

5%

200,001 to 250,000

9%

300,001 to 500,000

7.5%

250,001 to 300,000

6%

250,001 to 300,000

9%

over 500,000

9%

300,001 to 500,000

7.5%

300,001 to 500,000

9%

over 500,000

9%

over 500,000

9%

I have no plans, at present, to introduce any further changes to the stamp duty structure applying for second-hand houses. However, the position will be kept under review in the light of developments in the housing market.