Vol. 571 No. 1
348 Mr. Crowe asked the Minister for Finance his views on whether there is a case to be made for a reduction, or even abolition of stamp duty for first-time buyers of second hand homes in order to enable these people to get on the property ladder. [19817/03]
I am informed by the Revenue Commissioners that data are not collected in a manner that enables the provision of precise details relating to the stamp duty yield associated with the sale of second hand homes. The Revenue Commissioners have, however, advised that the yield from stamp duty in 2002 on all house purchases by first-time buyers was approximately €29 million. As the purchases of new houses certified by the Department of the Environment, Heritage and Local Government as having a floor area of less than 125 metres square are exempt from stamp duty, it is reasonable to assume that by far the major portion of this yield from all house purchases by first-time buyers arises from the purchase of second hand homes.
The Revenue Commissioners advise if the stamp duty exemption for the transfer of residential property for first-time buyers had been raised in 2002 from the current threshold level of €190,500 to a threshold level of €250,000, the cost to the Exchequer would have been approximately €13 million in that year.
I am not in favour of giving a total exemption from stamp duty on second-hand houses to first-time buyers for both Exchequer cost reasons and because there is no guarantee that the tax revenue thus foregone would accrue to the purchasers. However, I should point out that first-time buyers can avail of a significantly reduced rate of stamp duty in a number of the price bands associated with the purchase of second-hand residential property compared with other owner-occupiers, and also compared to investors who pay stamp duty at the full rate on any residential property purchased, whether new or second-hand.
Any change to the current rates or thresholds associated with stamp duty on residential property for first time buyers would have to be considered in the overall context of the 2004 budget and Finance Bill.
349 Mr. Crowe asked the Minister for Finance the cost to the State of eliminating stamp duty for first-time buyers of second hand homes. [19818/03]
I am informed by the Revenue Commissioners that data are not collected in a manner that enables the provision of precise details relating to the stamp duty yield associated with the sale of second-hand homes. The Revenue Commissioners have, however, advised that the yield from stamp duty in 2002 on all house purchases by first-time buyers was approximately €29 million. As the purchases of new houses certified by the Department of the Environment, Heritage and Local Government as having a floor area of less than 125 metres square are exempt from stamp duty, it is reasonable to assume that by far the major portion of this yield from all house purchases by first-time buyers arises from the pur chase of second hand homes and that this would have been the cost of such exemption in 2002. A current cost figure is not available.
I am not in favour of giving a total exemption from stamp duty on second-hand houses to first-time buyers for both Exchequer cost reasons and because there is no guarantee that the tax revenue thus foregone would accrue to the purchasers. However, I should point out that first-time buyers can avail of a significantly reduced rate of stamp duty in a number of the price bands associated with the purchase of second-hand residential property compared with other owner-occupiers, and also compared to investors who pay stamp duty at the full rate on any residential property purchased, whether new or second-hand.
350 Mr. Crowe asked the Minister for Finance his views on whether the fact that the stamp duty for first-time buyers attempting to buy new homes, and for first-time buyers attempting to buy second-hand homes is largely the same, pushes many people out of the second-hand home market into new developments where they contribute to spiralling house prices. [19819/03]
I should point out that the stamp duty rates applying on new and second hand property for first-time buyers are not comparable. There is no stamp duty on the purchase of new residential property for owner-occupiers, including first-time buyers, where the dwelling is not greater than 125 square metres. If a new dwelling is more than this size, stamp duty is charged on the site value or on one-quarter of the full house value, whichever is the greater. With regard to the transfer of second-hand property, first-time buyers are exempt from stamp duty where the consideration is up to €190,500 and can avail of significantly reduced rates in stamp duty compared with other purchasers where the consideration is up to €381,000.
351 Mr. R. Bruton asked the Minister for Finance if his Department has given consideration to the idea of abolishing stamp duty for first-time buyers who are buying a second-hand home within a limit of ?250,000; the likely cost of this policy change; and if he will make a statement on the matter. [19833/03]
I am informed by the Revenue Commissioners that data are not collected in a manner that enables the provision of precise details relating to the stamp duty yield associated with the sale of second-hand homes. The Revenue Commissioners have, however, advised that the yield from stamp duty in 2002 on all house purchases by first-time buyers was approximately €29 million. As the purchases of new houses certified by the Department of the Environment, Heritage and Local Government as having a floor area of less than 125 metres square are exempt from stamp duty, it is reasonable to assume that by far the major portion of this yield from all house purchases by first-time buyers arises from the purchase of second-hand homes.
However, first-time buyers can avail of a significantly reduced rate of stamp duty in a number of the price bands associated with the purchase of second-hand residential property compared with other owner-occupiers, and also compared to investors who pay stamp duty at the full rate on any residential property purchased, whether new or second-hand.
On the cost of a policy change, the Revenue Commissioners advise that, if the stamp duty exemption for the transfer of residential property for first-time buyers had been raised in 2002 from the current threshold level of €190,500 to a threshold level of €250,000, the cost to the Exchequer would have been approximately €13 million in that year. Any change to the current rates or thresholds associated with stamp duty on residential property for first-time buyers would have to be considered in the overall context of the 2004 budget and Finance Bill.
