Call to scrap stamp duty for first-time buyers

Stamp duty for first-time buyers should be abolished, the organisation representing auctioneers and valuers has said.

The call from the Institute of Professional Auctioneers and Valuers comes amid rising concern about increasing mortgage interest rates which commentators say will hit first-time buyers particularly badly.

Fintan McNamara, chief executive of the institute, said it would be lobbying for the abolition as well as a widening of the stamp duty bands, in the run up to December's budget.

The Government was now in a very healthy financial position to provide some relief to first-time buyers, said Mr McNamara, who stressed the social responsibility on the Government to ensure people had access to housing.

"Recently released figures show that the Government brought in a staggering €1.9 billion in stamp duty so far this year, an increase of 43 per cent on the same period in 2005," he said, "and capital gains tax is also up 15 per cent on last year.

The Government should now give a total exemption [ stamp duty] to first-time buyers so as to give young people a fair chance to get on the property ladder."

Currently first-time buyers are exempt from paying stamp duty on houses worth up to €317,500. duty on properties up to €381,000 is 3 per cent; up to €635,000, the duty is 6 per cent and on properties worth more than €635,000 the upper level of 9 per cent is payable. With the average cost of a house in the greater Dublin area now at €500,000, Mr McNamara said the current bands were "far too restrictive". He said €635,000 was the price of a "very modest house in the capital".

The rate at which the upper limit kicks in should be raised substantially in the December budget, he said. Such a widening of stamp duty bands would be self-financing, he added.

"It would free up much more movement in house sales with more and more people trading up or down," Mr McNamara said. "This Government has had more than its fair take from residential housing. The Government now has an ideal opportunity to ease the burden on house buyers."