Fine Gael has called for a major reduction in what it calls the "unfair and unintended" tax burden on children inheriting modest family homes from their parents.
The party's finance spokesman, Mr Michael Noonan, yesterday proposed the exemption of the family home from inheritance tax in cases where the inheritor lived in that house immediately before the death of the owner. He also proposed that the threshold above which the tax applies be more than doubled, to £400,000 from the present £192,900.
"It is abundantly clear that the exemption thresholds for inheritance tax have not kept pace with house price inflation," he said. Many houses in Dublin which were bought for less than £90,000 in the late 80s were now worth in excess of £500,000 because of super-inflation, he added.
Mr Noonan said the benefits of the proposed changes should be confined to those who do not already own a family home, and that there should be a claw-back of the relief if the property is sold within 10 years, if the proceeds are not used to buy another house or to pay for nursing home care.