FF to backdate stamp duty cut for new buyers
Thursday May 03 2007
FIANNA Fail will today promise to immediately abolish stamp duty for first-time buyers if returned to power - and backdate the cut to house purchases fully completed since April 30.
The party is hoping the launch of its three-pronged stamp duty package in the Fianna Fail manifesto this morning will take the focus off the growing controversy over the Taoiseach's personal finances.
The Irish Independent can reveal Fianna Fail is also promising a substantial increase in mortgage interest relief in Budget 2008.
The party will say backdating the abolition of the duty on house sales where contracts were presented for stamping and the tax paid since April 30 will end uncertainty in the market.
Finance Minister Brian Cowen's package of stamp duty measures will cost €76m and are targeted solely at first-time buyers.
A senior party source said: "Our aim is to help first-time buyers. They come to the market with no equity. It's the new blood that matters most."
The party will promise to abolish stamp duty for first-time buyers immediately on return to government.
But they will make it retrospective for all deeds presented to the Revenue Commissioners for stamping since April 30.
Essentially this means the deadline will be the ultimate conclusion of the house purchase, when the tax is paid, so it will include some sales agreed before April 30.
This move is seen by the party as essential to remove the uncertainty from the housing market.
The annual gain in mortgage interest relief will increase from €266 to €333 for a couple with a joint mortgage of €400,000 over 33 years at an interest rate of 5pc. And the gain will go up from €133 to €167 for a single person on a mortgage of €200,000 on the same terms. The tax relief on interest payments will increase from €16,000 to €20,000 for a couple and from €8,000 to €10,000 for a single person. This follows the doubling of the relief in the last budget. Even though the lower income tax tax rate is reducing from 20pc to 18pc, Fianna Fail will leave the rate of relief at 20pc, otherwise this tax cut would reduce the level of relief.
The stamp duty cut will cost €66m per annum, but only €44m this year and the mortgage interest relief increase will cost €10m.
Mr Cowen will also say this policy is consistent with the views he has expressed so far about not doing anything to destabilise the market.
Monday, April 30 was chosen as the cut off point as it is the day after the general election was called.
Unlike the plans of the PDs and Fine-Labour, Fianna Fail is not promising any reductions for second-time home buyers.
Anticipating the Fianna Fail move today, Labour leader Pat Rabbitte went further than ever before in suggesting his party and Fine Gael would abolish stamp duty immediately.
Fine Gael and Labour's joint policy document doesn't specify a timeframe for stamp duty plans, saying it will be "a priority".
Meanwhile serious questions still remain over the controversial payments to Bertie Ahern in the early 1990s, even though he has the backing of his ministers.
Mr Ahern was emphatically supported by Mr Cowen and Tanaiste Michael McDowell as questions continued to rage over a previously undisclosed STG£30,000 (€44,000) payment to former girlfriend Celia Larkin. Mr Cowen said he was not embarrassed about questions surrounding Mr Ahern. He did not accept there had been any untruths told over 'Bertiegate'.
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