Vol. 539 No. 2
3 Mr. J. Mitchell asked the Minister for Finance the total yield to the Exchequer from stamp duty on residential properties in the first five months of 2001; the number of dwellings in this regard; and if he will give similar figures for the same period in 2000. [19109/01]
I am informed by the Revenue Commissioners that the yield from stamp duty on residential properties in the first five months of 2001 and the number of documents stamped in that regard is £79.89 million in respect of 8,320 documents stamped. The corresponding figures for 2000 are £93.01 million in respect of 13,915 documents stamped.
The figures the Minister has given show an alarming decrease in stamp duty and a decrease in the number of houses being stamped. What accounts for that?
I want to explain why the reply refers to documents stamped and the Deputy's question asks about the number of dwellings in this regard. The Revenue Commissioners have informed me that stamp duty data on residential property is collected and maintained by reference to the number of documents presented for stamping rather than the number of dwellings. However, the number of documents should, in general, correspond with the number of dwellings as only in exceptional cases would more than one document be presented for stamping on the transfer of residential property. The reply relates to documents stamped and the question relates to residential units, but there should not be much of a difference. I do not want to quibble over that.
The main reason there was a drop in yield in the first five months is the increase in the exemption thresholds for second-hand houses in June last year. I increased the exemption threshold from £60,000 to £150,000 in the case of first time buyers of second-hand houses and from £60,000 to £100,000 for other owner occupiers. I also reduced the rates of stamp duty values in excess of these thresholds up to values of £300,000.
That is an extraordinary admission. It is a dramatic collapse in stamp duty and houses completed. Does this tell the Minister that his policies have not only dramatically failed but that they are in urgent need of reversal?
The total yield from stamp duty, which covers not only residential units, has increased. The overall stamp duty yield has increased by over 20% compared to the corresponding figure last year. However, stamp duty as it relates to residential units is down.
That is what we are talking about.
The Deputy said in his second supplementary question that stamp duty in general was down. However, the total yield from stamp duty has increased. The reason for the drop in yield is the increase in the exemption limits which I applied to second-hand houses in June last year. For the first five months of last year the thresholds were lower. As a result, in the second Finance Act, 2000, which Deputy McGrath will remember, I increased the threshold limits for first time buyers of second-hand houses and for other owner occupiers from £60,000 to £100,000. I accept the point that when the number of documents stamped is compared with the number of dwellings the number of dwellings on which stamp duty is paid appears to be down. Stamp duty is not paid on new residential property where the purchaser is the owner occupier and the house is not greater than 125 square metres. That has been the case for a long number of years. Stamp duty does not apply generally to new residential property of owner occupiers. One would not necessarily be able to relate one to the other. I accept the statement in a later Parliamentary Question that the number of housing starts appears to be less this year than in 2000 because evidence from the Department of the Environment and Local Government seems to indicate that.
The Minister is ingenuous.
Deputy McDowell knows I am a genius.
I said ingenuous.
I said disingenuous.
The figures collapsed in five months from 13,915 to 8,320. Is that correct? Did I hear the Minister correctly? That is a decrease of 5,600 which as a percentage of 8,320 is a significant decrease.
I do not want to mislead the Deputy. Most of this relates to second-hand houses.
It does not matter. This gives us a clear picture that the Minister's housing policies are a total failure and that there is a need for an urgent reversal of those policies. Will the Minister not accept that fact?
I do not want to be disingenuous about this. If the Deputy is making the separate allegation that the number of housing starts is down, I am willing to debate that with him. The figures will prove that they are down, but it would be incorrect to relate the yield from stamp duty and the number of documents stamped with the fall-off, if there is any, in the number of houses being produced. Stamp duty on houses mostly comes from second-hand houses.
The Deputy's second question relates to the failure of the Government's housing policy. Since we came to power we have endeavoured on a number of occasions, through some fiscal changes and other supply measures, to increase the supply of housing and it is true to say we have had some difficulty. We had two Finance Bills in 1998 and two in 2000, and the second Bill in each year related solely to the housing market. We are keeping the situation under review and it is about time we let the market settle down somewhat.
It is not time to let the market settle down at such a low level of output. Output is down at least 17% compared to this time last year. The Government has produced the first generation of young people who have no prospect of buying their own home. That is directly attributable to the Minister's policies.
A question please, Deputy.
Will the Minister not now change his policies and give young people a chance to buy their own home as they have had for generations?
Since 1997, we have made policy changes on a number of occasions to try to give the first-time buyer the opportunity to get their foothold on the housing ladder. We had considerable success with some of the changes we made in that they gave the first-time buyer a better chance to do that, but I readily accept that it is proving exceptionally difficult to meet the objectives the Deputy has set. The Government has shown a willingness to make changes and if the Deputy, or anybody else, wants to put forward some good ideas, it is willing to consider them.
Can I ask one further question?
No. We are way over time. I call Question No. 4.
Has the Minister seen Dublin Corporation's schedule of State property acquired by—
I ask the Minister to deal with Question No. 4.
