New stamp duty plan aims to kickstart house market
DEVELOPERS who accept a property in exchange or as part payment for a new home will not have to pay stamp duty under measures announced yesterday.
Instead, the duty will only become due when the 'swapped' or 'traded in' house or apartment is sold on.
Announced by Finance Minister Brian Lenihan as a measure to help stimulate the economy, the stamp duty trade-in scheme is intended to address the overhang of up to 50,000 unsold properties available for sale.
But the move was roundly criticised by auctioneers and the building industry, with experts saying it was a sop to developers. Others said there was little value for the consumer in the measures.
The scheme will only apply where a developer agrees to take a second-hand home, and is prepared to meet the stamp duty bill.
Carolyn Coyle of Savills New Homes said it wouldn't have a "great impact" because the developer would have to pay the tax.
"The reason that some developers aren't interested in the trade-in is because of the stamp duty implications. They don't want to pay stamp duty on a property they aren't interested in. Delaying the payment of stamp duty will have little impact," she said.
The Irish Auctioneers and Valuers' Institute said it would have a "minimal effect", while the Institute of Professional Auctioneers and Valuers said it would not compensate for the "short-sighted" Budget.
"It's a sop to the industry, but it won't compensate for the hugely negative signals that the short-sighted Budget has given out," chief executive Fintan McNamara said.
Builders lobby group, the Irish Home Builders Association, were unimpressed and said it would have little effect.
"I would like to see more detail," director Hubert Fitzpatrick said.
Benefit
"By and large builders want to sell units, they don't want to be taking trade-ins."
Ray Grehan of Glenkerrin Homes, which currently has units to sell in the prestigious Grange development in Blackrock, Co Dublin and Ballintyre in Dublin 16 was also underwhelmed.
"There is no major benefit to the scheme but I could see how it would work in some cases. A first-time buyers' grant for one year would have been a better alternative. It would have reduced the stock and stabilised the housing market."
Full details of the scheme will be contained in the Finance Bill, due to be published at the end of the month. The scheme is expected to be in place until December next year.
- Yvonne Hogan
