IPAV PRESS RELEASE |
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06th November 2006 |
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Auctioneers Propose Radical Changes in Stamp Duty and Mortgage Interest Relief for Budget 2007 |
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| A radical shake-up of the current Stamp Duty regime including its abolition for all first-time buyers is proposed in the pre-Budget submission of the Institute of Professional Auctioneers and Valuers published today. | ||
| In its submission, drafted by economist Jim Power, IPAV has also called for a reduction in the number of Stamp Duty bands and lower rates. Significantly, the Institute says Stamp Duty should only be paid on the excess amount of a house price above the threshold and not on the entire amount as at present which it says is grossly unfair. | ||
| In addition, the auctioneers have called for the doubling of mortgage interest relief for first-time buyers and a doubling of the income tax exemption limit in the Rent-a-Room scheme. | ||
| According to IPAV, house prices nationally are likely to increase by around 12% this year and growth of around 5% looks possible in 2007. | ||
| IPAV President Seán Mason said the housing market now appears to be on the way to achieving a soft landing. . | ||
| “This would be the most desirable outcome because, given the inordinate dependence of the Irish economy on residential housing activity, a hard landing for the housing market would cause serious economic difficulties. Consequently, it is incumbent on policymakers to facilitate a soft landing for the market.” | ||
| Mr Mason said the latest data on housing affordability indicated that affordability is deteriorating but there were a number of ways that the Government could alleviate the growing pressures on first time buyers. | ||
| “The current Stamp Duty regime acts as a major disincentive to labour market mobility. Lower Stamp Duty rates and wider bands would increase mobility and could prove self financing.” | ||
| IPAV is proposing the following measures: | ||
| Stamp Duty should only be paid on the excess above each threshold and not on the entire price which is unjust. | ||
The following rates and thresholds replace those currently in use: |
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| - Up to €250,000 | Nil * | |
| - From €250,001 - €500,000 | 3% | |
| - From €500,001 - €1,000,000 | 5% | |
| - In excess of €1,000,001 | 6% | |
| For non first-time buyers, the various thresholds should be indexed every year in line with projected house price inflation. | ||
| A doubling of mortgage interest relief for first-time buyers which would help alleviate the financial distress caused by rising interest rates and rising house prices. | ||
| A doubling of the income tax relief for the Rent-A-Room scheme | ||
| “IPAV’s clear intention in our Budget submission is to focus on helping first-time buyers which are the key to our continued successful economic growth,” said Jim Power. “Mortgage interest relief for first-time buyers cost the Exchequer approximately €160m in 2005, a relatively small sum in terms of the overall revenue from the construction industry. By combining the incentives for first-time buyers and alleviating the severe impact that Stamp duty has on non-first buyers, the Government can facilitate much greater activity in the residential housing market which would prove self-financing.” | ||
Note for editors: * Current Stamp Duty rates for non first-time buyers and investors: Up to €127,000 Nil |
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Ends For further information contact: Seán Mason on 086 - 2558594 or |
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