Abolition of stamp duty for first-time buyers urged

THE abolition of stamp duty for first-time buyers was called for in the pre-Budget submission of the Institute of Professional Auctioneers and Valuers (IPAV).

The IPAV proposal also called for a reduction in the number of stamp duty bands and lower rates.

In its submission, drafted by economist Jim Power, 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.

In addition, the auctioneers 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 a soft landing in the housing market would be the most desirable outcome. “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 indicated the decrease in affordability, 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.”

It called for various thresholds to be indexed every year in line with projected house price inflation for non-first-time buyers.

Jim Power said “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.

Meanwhile the Irish Bankers Federation, the Consumers’ Association of Ireland and Chambers Ireland are calling on the Government to abolish stamp duty on debit (Laser), ATM and credit cards in the forthcoming Budget.