First-time buyers could save €11,550
Finance Minister Brian Cowen said this represented a maximum saving of €11,550 for first-time buyers who are trying to get on the property ladder from next January.
"This new €317,500 limit is above the national average for the price of second-hand homes nationally and should be a major benefit to first-time buyers," Mr Cowen said.
Environment Minister Dick Roche said the decision to increase the threshold at which first-time buyers will have to pay stamp duty on second-hand homes will resolve a problem for many young people entering the housing market.
The €60 million package announced in yesterday's Budget will see a two-thirds increase in the threshold above which first-time buyers currently become liable for stamp duty.
At the moment, first-time buyers have to pay 3% stamp duty on second-hand homes over €190,501. This stamp duty increases to 3.7% on second-hand homes over €254,001.
But from January first-time buyers will pay no stamp duty on any second-hand homes costing less than €317,500.
After that they will pay a stamp duty of between 3% and 6% on houses up to €635,000 and 9% on all second-hand homes over that price.
The national housing organisation, Threshold, welcomed the major concession given to first-time buyers in the Budget.
Threshold director Patrick Burke said: "This measure will make a massive difference to those who, up to now, were struggling to get on the property ladder."
While Fine Gael also welcomed the new concessions given to first-time buyers, they warned these benefits are already being wiped out by price inflation in Dublin.
Mr Cowen's own figures show the average price paid for second-hand homes in the capital was €308,000 at the end of June this year, Fine Gael's Environment spokesman Fergus O'Dowd said.
With prices rising at about 1% per month, that average has already breached the €317,500 level the minister has exempted, Mr O'Dowd added.
"That means that young Dubliners, struggling to get onto the property ladder may still be forced to move further and further away from the city to find a home," he said.
The minister should have raised the limit to at least €400,000 to allow for price inflation if he wanted to really help first-time buyers, Mr O'Dowd said.
Meanwhile, the Irish Auctioneers and Valuers Institute (IAVI) welcomed the 66% increase in the stamp duty threshold for first-time buyers.
