A rising number of residential and non-residential property sales has led to a new wave of stamp duty receipts flowing into the the Government’s coffers at levels not seen since the pre-boom years.
Stamp duty receipts have almost doubled to €300m since the recovery began, prompting calls for greater support to be given to mortgage holders to help bolster the housing market.
While still a far cry from the billions of euro in property taxes collected in the boom, the surge in stamp duty receipts is a welcome boost for the Coalition’s spending plans.
Department of Finance figures show 42,971 residential property transactions which netted €102m in stamp duty last year, over double the €45m collected in 2011. Non-residential property stamp duty receipts for 22,955 transactions also brought in €173m last year compared to €90m in 2011.
Finance Minister Michael Noonan released the figures to Fianna Fáil finance spokesman Michael McGrath in a recent parliamentary answer.
However, the recent boost to the exchequer figures may only be a temporary bonanza for government spending, if further supports and relief are not made available to mortgage holders, Mr Noonan has been warned.
“The increase in stamp duty is indicative of a recovering housing market albeit from a very low base,” said Mr McGrath.
“However, the market is still dysfunctional in many ways, with very few new homes being built in urban areas, high mortgage rates, and the reluctance of banks to facilitate people to retain their tracker mortgage when they want to trade up.
“Until these issues are addressed we will continue to have a housing market that isn’t working for large numbers of families.”
The figures show the biggest rise in stamp duty receipts was in the year leading up to 2014, where there has been a significant rise in residential property sales. Stamp duty receipts rose from €66m to €102m as property transactions rose from 29,741 to 42,971.
While the extra money coming into the exchequer for the receipts in residential and non-residential sales has doubled over four years, it still remains significantly lower than the sums raked in during the property boom.
By 2003, land and property stamp duty accounted for over €1bn in exchequer funds. This more than doubled at the peak of the boom when stamp duty amounted to some €2.3bn for state coffers by 2007.
The amounts now coming in through stamp duty is similar to that collected in 1995, when stamp duty receipts amounted to €318m, at the beginning of the boom.
Despite the revenue increase, Mr McGrath maintains the housing market will not function properly until concerns about high mortgage rates, particularly variable rates, are addressed by the Government, the banks and the Central Bank.
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