Vol. 539 No. 2
15 Mr. Callely asked the Minister for Finance if he will consider special concessions and exemptions of stamp and other such revenue duties when a person is purchasing a house for a disabled relative; if he will give favourable consideration to such a proposal; if he will set up a working group to consider implications in this regard; and if he will make a statement on the matter. [18375/01]
In relation to stamp duty, where a person purchases a house for a disabled relative or for any other person, the purchaser can qualify for either the first time buyer or other owner-occupier buyer stamp duty rates provided the house is occupied by his/her relative or any other person on behalf of the purchaser as a principal private residence and no rent is derived from the property for five years after the purchase or until the house is sold.
Last year, in the Finance (No. 2) Act 2000, I increased the stamp duty exemption threshold for first time owner-occupier buyers of second-hand residential property from £60,000 to £150,000 and for other owner-occupiers to £100,000. The rates were reduced for transfers at the lower end of the market for properties in excess of these amounts. Many first time owner-occupier buyers of second-hand houses 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.
It should also be noted that 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. In the case outlined by the Deputy, the purchaser would be considered an owner-occupier in such cases subject to the conditions already outlined above.
I have no plans, at present, to introduce any further changes to the stamp duty structure applying for second-hand houses or to set up a working group in this regard. However, the general stamp duty position for residential property will be kept under review in the light of developments in the housing market. As regards other taxes, the sale of new property is subject to VAT at 12.5%. The VAT rating of goods and services is largely subject to the requirements of EU VAT law with which Irish VAT law must comply. While we can maintain the zero rating on those goods and services which were zero rated before 1 January 1991, we cannot introduce any new zero rate of VAT. Therefore, we cannot relieve the purchase of any new property of VAT.
I thank the Minister for his reply. I was particularly interested by his comments on the working group detailed to investigate the issue of stamp duty on second-hand purchases. Deputies McDowell and Mitchell will be aware of the high price of houses in Dublin. I have been in contact with a number of people who are in the fortunate position of being able to purchase properties for their disabled children. As Members will understand, these people like such properties to be located in close proximity to their own homes. At present, a house in the Dublin area costs in the region of £250,000 and such a purchase entails a burden in terms of stamp duty and other excise duties and taxes which must be paid. Will the Minister ask the working group to consider how people in the lucky position of being able to purchase a house for their disabled children rather than being obliged to place them in institutionalised care might be accommodated in this regard? There is merit in providing assistance to the people to whom I refer because of the obvious benefits it would have for communities.
I would not like to rule out any innovative suggestion in this regard. However, I have tinkered around to quite an extent with stamp duty in recent years and I am not overly given to the idea of introducing further categories in this area for obvious reasons such as the possibility of abuse, avoidance, etc. However, I will consider the Deputy's suggestion.
I thank the Minister for his kind response. I draw to his attention the beneficial tax concessions package that has been put in place for disabled drivers and passengers.
That matter is not appropriate to Question Time.
