Dáil Éireann Debate, Wednesday - 20 June 2012
52 Deputy Michael McGrath asked the Minister for Finance his view of the success to date of measures introduced in the budget with a view to stimulating the domestic housing market; and if he will make a statement on the matter. [30042/12]
Amharc ar fhreagraIn line with the commitment in the Programme for Government, in Budget 2012, I increased the rate of mortgage interest relief to 30% for first-time buyers who purchased homes between 2004 and 2008. This, I believe, will go some way to helping mortgage holders who purchased at the peak of the housing market. Under the current system, mortgage interest relief is set to be abolished in 2013. In Budget 2012, I extended the current rates of relief for anyone purchasing in 2012. This is 25% for first-time buyers and 15% for non-first time buyers. Anyone currently qualifying for mortgage interest relief or who purchases in 2012 will receive the relief up until the end of 2017. These measures will cost in the region of €55 million per annum. Mortgage interest relief is set to be abolished from 2018.
There were two other property related tax measures in the Budget: the reduction in the rate of Stamp Duty on non-residential property transactions to a single rate of 2%, and the Capital Gains Tax incentive for property bought between 7 December 2011 and 31 December 2013, which provides that, if the property is held for at least seven years, any gain related to the initial seven year holding period will be relieved from CGT. The measures will facilitate greater activity within the property market, leading to additional employment and activity in related sectors. Only the CGT measure relates to the housing market.
The measures have been in place for six months so it is early to assess their impact. However, I am advised by the Revenue Commissioners that there has been an increase in the number of property transactions reported to the eStamping system for Stamp Duty purposes — there were a total of 20,317 such transactions recorded in the first five months of 2012 compared to 18,207 in the same period in 2011. I understand that a breakdown between residential and non-residential transactions is not available. These figures may be subject to change — for example, if a transaction is cancelled.
