Stamp duty yield down 95pc since boom peak
Published 23/08/2010 | 05:00
STAMP duty receipts will this year slump to just 5pc of what was gathered at the height of the property boom.
A record €2.9bn was paid in stamp duty in 2006 -- but the Government is on track to collect less than €150m this year.
Figures obtained by the Irish Independent show that just €57m was collected on sales of residential property up until the end of July, with an additional €51m collected on transactions of non-residential property.
It will lead to new clamour for the tax net to be widened so that the public purse is not so reliant on property sales.
The figures have not been so low since 1997, when just €322m was taken in -- with the amount collected soaring every year since then, until the economic slump hit.
The new figures highlight the Government's dependence on the tax during the boom years.
Last night, Labour's finance spokeswoman Joan Burton said that nobody in power seemed to realise that this revenue stream was finite, accusing the Government of living in a "fool's paradise".
Just four years ago, almost €3bn in stamp duty was collected, with €1.3bn of this coming from sales of residential property. It has slumped alarmingly since, with the biggest fall coming in 2009 when the total yield was down from €1.05bn in 2008 to a mere €329m.
The number of transactions has also fallen significantly, dropping from a total of 97,901 in 2006 to 33,671 last year, highlighting the drop-off in work for property-related services such as estate agents and solicitors. The number of transactions to date in 2010 are not yet available.
This year is also the first time the sums collected on residential property has risen above that collected for non-residential property.
However, Marie Hunt of property advisers CB Richard Ellis said they were expecting an upturn in the number of completed commercial sales in the third and fourth quarters.
She said that there were a number of sales in the pipeline, including Liffey Valley Shopping Centre at €350m, but she added that finalising deals was still proving to be difficult.
"There's an awful lot going on but very little in terms of deals being signed," she said.
Stamp duty is the tax charged on all property-related transactions, including house purchases, sales of land, and investment in commercial properties. It does not apply to first-time buyers of private homes.
First-time buyers are exempt from paying stamp duty on both new and second-hand homes.
Last year the Commission for Taxation recommended that stamp duty be abolished and a property tax introduced to provide a stable income. This could generate some €1bn a year.
However, the move would prove very unpopular with the electorate.
Ms Burton added that the Government missed a massive opportunity when the yield was at record highs. "They treated the revenue from stamp duty like it was going to go on forever," she said.