How to stamp out a U-turn? Talk louder, Brian reckons

IF Finance Minister Brian Cowen’s stamp duty reform was on the property market, some slippery estate agent would no doubt describe it as “niche and bijou”.

Which any streetwise punter would know meant small and only capable of appealing to a handful of people.

Considering the noise Fianna Fáil made about the abolition of stamp duty for first-time buyers — it was the only new policy to be revealed in its 150-page election manifesto. The initiative will affect just a few thousand homebuyers this year.

Mr Cowen hopes the louder he talks, the more it will drown out his undignified U-turn on the issue.

How quickly politics can turn on a knife-edge, as it was the then tánaiste, now ministerial memory, Michael McDowell, who took stamp duty to centre stage just before last December’s Budget with the incredible claim the Government could do without large swathes of this annual €3.7 billion windfall and should hand it back.

Mr Cowen could barely contain his disdain for the idea and refused to touch the levy as he laid out his financial shop window for the year. FG and Labour ran with the PD ball and pledged sweeping reform of the system cutting the nine bands to three and easing the burdens on buyers by only taxing the portion of the purchase price about the bands at the higher rate — not the whole deal.

Mr Cowen again attacked the plans, warning they would destabilise an already cooling property market and that the Rainbow’s call for the abolition of the tax on first-time buyers for homes below €450,000 would just push prices up for the property virgins.

But what a difference a run of bad opinion polls in the lead-up to a general election made.

Suddenly FF was the first -timer’s friend, promising total abolition and backdated to boot. The cutoff point was April 30, but was yesterday pushed back by a month, apparently, after pressure from those angry at the arbitrariness of the date.

Analysts predict the reform, which impacts on a mere 2% of sales and will cost the Government a mere €78 million will have little, if any, impact on the construction sector.

Its greatest effect will be to end the uncertainty surrounding the issue for the past six months — until pressure again builds ahead of this December’s Budget for much greater reform of one of the country’s most detested taxes.