Dáil Éireann díospóireacht -
Wednesday, 29 Sep 1999

Vol. 508 No. 1

Written Answers. - Stamp Duty.

Richard Bruton

Ceist:

405 Mr. R. Bruton asked the Minister for Finance the estimated cost to the Exchequer of eliminating stamp duty for first time buyers; whether an assessment has been undertaken by the tax advisory group of his Department on such a measure; and if he will make a statement on the matter. [18166/99]

Minister for Finance (Mr. McCreevy):

The stamp duty yield statistics available do not distinguish between first time buyers and other buyers. There is no stamp duty on the sale of new houses to owner occupiers except where the house is over 125 square metres. In the case of the latter category, the stamp duty is payable only on the site cost or a quarter of the value of the house, whichever is the greater. In the case of secondhand houses, the Revenue Commissioners have estimated that the cost to the Exchequer of eliminating stamp duty for first time buyers of secondhand houses would be of the order of £50 million or more.

Stamp duty rates for residential property were reduced significantly by the Government as part of the package of taxation measures in the Finance (No. 2) Act, 1998, arising out of the Bacon report on house prices. This reduction in stamp duty rates has been of benefit to all house purchasers, including first time buyers of secondhand houses.

The Bacon report considered that reductions in stamp duty on all residential property would lead to additional turnover in the secondhand house market thus increasing the range of housing available to first-time buyers. Reducing stamp duty on residential property in this way has made the secondhand house market more accessible for first-time purchasers. At that time the introduction of a specific exemption or relief for first-time buyers was considered. However, given the significant estimated costs involved, any specific exemption for first-time buyers would have prevented a reduction in the rates for residential property generally.

For these reasons the Government considered that reductions in the stamp duty rates applicable to all residential property, as recommended in the Bacon report, would be more beneficial to first-time buyers and the housing market in general than a specific total exemption aimed at first-time buyers only.