Bernard J. Durkan
Ceist:81 Mr. Durkan asked the Minister for Finance whether he will reduce stamp duty costs on family home conveyancing; and if he will make a statement on the matter.
Written Answers. - Stamp Duty on Conveyancing.
As I am sure the Deputy is aware, stamp duty is just one of a number of costs associated with the sale of houses. However, there exists a number of reliefs and exemptions in the stamp duty code specifically targeted at reducing the stamp duty element of the cost of family-home conveyancing.
New houses with a floor area below 125 square metres are exempt from stamp duty altogether. In this year's budget, I introduced an effective reduction in the stamp duty on new estate houses with a floor area of over 125 square metres, in order to give a boost to this area of house-building, and to assist families needing more spacious accommodation. The stamp duty charge for such larger new houses is now based on the site value of the property (subject to a minimum site value of 25 per cent of the total house value), whereas the change had previously been based on the full house price.
The costs of buying a house are also significantly reduced by virtue of mortgage interest relief, which is provided at significant Exchequer cost. The provision of 100 per cent mortgage interest relief for first-time buyers for the first three tax years in which they claim the relief was a significant initiative in the 1993 Budget. In addition, the grant for first-time buyers of new houses was increased from £2,000 to £3,000 in the budget. I should add that the selling of one's house is facilitated by the capital gains tax exemption that applies in respect of one's principal private residence.
In view of the generous reliefs that serve to reduce the cost of buying a family home, I do not have any proposals to further reduce the stamp duty element of that cost at present. In any event, it should be borne in mind that a reduction in the yield from stamp duty would have to be compensated for by increased taxation in other areas, in order to maintain the levels of funding needed for the Government's social and economic programme.