I propose to take Questions Nos. 44 and 47 together.
My assumption in this response is that the Deputy is referring to taxation and incentives relating to capital taxes and stamp duty. As the Deputy will be aware from previous replies there are already a number of existing capital tax reliefs that are available to property owners selling their home and additional assistance to first-time buyers such as the Help to Buy scheme (More information is available at www.revenue.ie/en/gains-gifts-and-inheritance/cgt-reliefs/index.aspx
and revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-15/15-01-46.pdf).
I am very conscious of the need to increase the supply of property available, particularly for first time buyers. In this regard, the Government has introduced a detailed plan for housing – Housing for All – which is intended to deliver more homes of all types for people with different housing needs and this government has allocated a record amount of funding under this strategy.
However, it is important to note that, taxation is only one of the policy levers available to the Government through which to boost overall housing supply. In line with the Department of Finance's Tax Expenditure Guidelines, consideration of whether a tax measure is the most appropriate policy tool for a given purpose is required and the presumption should be that non-tax measures should be considered before the use of a tax–based measure. I would wish to avoid any tax expenditures that could distort the market, particularly where it is not clear that they would in this instance result in additional supply or reduced prices for first time buyers. Therefore I do not propose to introduce additional capital tax reliefs for gains from property sales.
In respect of stamp duty, as it is the buyer who is liable for payment of it, not the seller, if I were to provide any form of exemption/relief from it for a subset of properties or property buyers it would represent an unfair advantage to the sellers and/or buyers of such properties over those selling/buying properties that would not qualify. It is also very likely that any benefit that such a measure might generate for a subset of sellers/buyers would be quickly swallowed up by increased asking/offer prices, as the volume of such properties is unlikely to be sufficient to deflect market trends to any notable degree. Such a measure would also likely feed demand and compound what is already a significant supply side problem.
The Deputy should also note that a significant motivation for introducing the 10% stamp duty charge on the multiple purchase of houses is to dis-incentivise such purchases by institutional investors with a view to levelling the playing field for first time buyers and others interested in buying a home to live in. This measure should help improve the supply of houses available to first time buyers.
Finally, I would also draw the Deputy’s attention to the particular actions within the Housing for All plan that specifically target first time buyers:
- a supply of an unprecedented 4,000 affordable purchase homes, on average, every year for families, couples and single people
- a new local authority-led ‘Affordable Purchase Scheme’
- a new ‘First Home’ shared equity scheme for buyers of new build homes in private homes
- a reformed ‘Local Authority Home Loan’ scheme
- an ‘Owner Occupier Guarantee’, to secure homes for first-time buyers and other owner-occupiers
