Vol. 567 No. 6
90 Mr. Howlin asked the Minister for Finance if he is planning the introduction of a tax break for first time house buyers; the nature of the proposal being considered; and if he will make a statement on the matter. [14639/03]
There are already in place a number of tax incentives to support residential property purchases by first time buyers. All owner-occupiers, including first time buyers, are generally exempt from stamp duty on new houses where the property is 125 square metres or less. In addition, there is more favourable stamp treatment for first-time buyers of second hand houses up to €381,000 as compared to other purchasers. First-time buyers in common with other owner-occupiers are also not subject to capital gains tax on the gain from the disposal of their main residence. First-time buyers also qualify for tax relief on mortgage interest payments and the Deputy will recall that in budget 2003, I increased the annual ceiling on mortgage interest payments by first time buyers which qualify for relief from €3,175-€6,350 – single-married or widowed – to €4,000-€8,000 – single-married or widowed. In addition, the period of time in which the higher amount of relief may be claimed was increased from five to seven years. First-time buyers who started to claim tax relief in respect of mortgage interest in the tax year 1998-99 or later stand to benefit from the new arrangements.
The housing market is a complex and dynamic one and demands continuous monitoring and adjustments to address changing circumstances. In view of the record increases in housing completions in recent years, I consider that the tax incentives available at present for the purchase of residential property represent the optimal mix and are adequately balanced in the light of the current state of the housing market. Any proposals to alter this position will be considered as part of the normal review of existing reliefs in the context of the 2004 budget and Finance Bill cycle. In this context, I undertook in the Seanad debate on the Finance Bill 2003 to examine a proposal suggested to me whereby potential first time buyers would receive tax credits in respect of savings made within a special scheme solely for the purchase of their first home.
