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.