Fine Gael plans to cut stamp duty on houses

Fine Gael is planning to implement across-the-board reductions in stamp duty on houses if elected next year, the party has confirmed.

However, the party's proposal to cut the duty on house purchases drew a derisive response from the Progressive Democrats, who said it was "curious" Fine Gael had remained silent on the issue for years.

The Green Party criticised plans by Fine Gael and the PDs for across-the-board cuts in stamp duty, while making its own proposals for more modest reductions in the tax.

Labour, meanwhile, also suggested that the burden of stamp duty could be reduced.

According to a Fine Gael spokeswoman, Finance spokesman Richard Bruton will shortly unveil proposals aimed at easing the plight of first-time buyers, as well as helping older people to move house.

The party is proposing that first-time buyers would not pay stamp duty on houses costing up to €450,000. At present, the threshold is € 317,500.

It also says housebuyers would pay stamp duty only on the amount over € 450,000.

At present, the tax is levied on the entire house price.

Under Fine Gael's proposals, older and disabled houseowners would be accorded the same benefits as first-time buyers in order to encourage them to trade down to smaller, more suitable accommodation.

PD Senator John Minihan said Fine Gael's entry to the debate about stamp duty was "better late than never".

"The Progressive Democrats kick-started the debate on stamp duty at our think-in in Malahide last month, when we pledged to address the issue on behalf of homeowners.

"It is certainly interesting that Fine Gael did not take the opportunity to discuss this important issue at their own think-in.

"I wonder if this could have anything to do with the fact that their special guest at that event was one Pat Rabbitte?" he asked.

"The choice for voters at the election is now clearly between a coalition involving the Progressive Democrats, which is committed to tax reductions, or a coalition containing Labour and/or the Greens, who will be unable to agree on tax policy."

The Greens' Finance spokesman, Dan Boyle, condemned proposals for across-the-board cuts as "Dutch auction politics" but promised a stamp duty exemption for those trading down to smaller properties.

"The obsession with which other political parties are attaching to across-the-board cuts to stamp duties will do nothing to help first-time buyers and most probably only help increase the profit margins of property developers," he said.

"It is the area of thresholds that needs most attention, not only in relation to stamp duties but also in applying other taxes which need to be made more fair, such as inheritance tax.

"This is a debate that requires a degree of sophistication beyond the crass soundbites of the Tánaiste and the Progressive Democrats."

Labour is also reported to favour some relief on the tax, to be implemented progressively over a number of years.

Minister for Finance Brian Cowen appeared to indicate no change to the stamp duty regime when making a pre-budget statement last week. Mr Cowen said he did not intend "interfering in the property market".

Last month, Tánaiste and leader of the PDs Michael McDowell said the Government did not need the €2.7 billion the Exchequer raises in stamp duties each year.

About one-third of this sum comes from residential property and just €70 million is raised from first-time buyers.