Exemptions will 'boost the market'
Published 06/12/2012 | 17:00
AN exemption from the property tax for first-time buyers and purchasers of new homes should help boost the property market.
Anyone who buys a new, or previously unoccupied, house or apartment will escape the property tax until 2016, leaving them at least €250 a year better off.
The same incentives have been offered to first-time buyers who buy any home as part of attempts to get the property market moving.
The measures are badly needed. Some 17,000 completed houses and apartments are currently lying empty across the country, while some 1,100 ghost estates lack basic services, including roads, street lighting and sewage treatment plants.
Last year, the Government increased mortgage interest relief for first-time buyers which helped boost sales, but sales are still very low as people wait to see if prices fall any further.
It comes after six years of falling prices, with the most recent figures showing slight increases – albeit of just 1pc.
An exemption from the property tax could encourage people to purchase property, Finance Minister Michael Noonan said.
"The residential market is showing increased activity due to the return of economic growth and the impact of the enhanced mortgage interest relief I introduced last year," he said.
"This measure will end on December 31. In order to maintain momentum, I am providing an exemption from the new property tax up to the end of 2016 for any new or previously unoccupied homes bought in that period, and purchases of any homes in 2013 by first-time buyers will also be exempt for the same period."
The move was welcomed by the industry, but the relief should have been extended to anyone buying property.
"Given that mortgage interest relief was not extended, it is helpful that first-time buyers will be exempt from the property tax for four years if they buy in 2013," managing director of Lisney's auctioneers, James Nugent, said.
"It is also beneficial for the property market generally, and in getting a resolution to unfinished estates, that units not previously occupied will be exempt from the tax until 2016.
"However, we believe that it would have been better to extend the exemption to all purchasers of all types of properties. Mover purchasers and investors should be treated the same as first-time buyers."
The Institute of Professional Auctioneers and Valuers (IPAV) said the Budget provided "no stimulation" for the property market, and ending the mortgage interest relief scheme was "particularly regrettable".
Irish Independent Supplement