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Fine Gael Proposes Stamp Duty Reforms

by Jason Gorringe, Tax-News.com, London

19 March 2007

Speaking last Thursday, Fine Gael leader, Enda Kenny pledged to "end stamp duty as we know it" if chosen to govern the Republic of Ireland in the next General Election.

Speaking at a Party meeting in Limerick, Mr Kenny revealed that a "re-balancing" of taxation policy in favour of families and young people would be top priority for a Fine Gael government. He said that he was determined to help families to cope with the cost of living, and also to radically reform the "punitive" stamp duty system.

He stated that:

"The proposals I am setting out today will have two main effects. They will help families cope with day-to-day cost of living issues and they will mark the end of stamp duty as we currently know it. The stamp duty proposals mark an evolution of the Party's reform plans first set out in May 2004. The total cost of the proposals set out is EUR650 million, EUR200 million for the family-focused proposals and EUR450 million on the stamp duty reform."

The key elements of the FG proposals are:

  • An EUR1,000 increase in the tax credit for people working in the home caring for children or elderly relatives;
  • An EUR5,000 increase in the standard rate tax band for families;
  • Effectively abolishing stamp duty for first-time buyers (FTBs) by raising the exemption limit for FTBs of second hand homes to EUR450,000;
  • Reducing the number of stamp duty rates from 7 to 3. The new rates would be 0%, 5% and 9%;
  • Ensuring that taxpayers only pay the higher rate of stamp duty on the portion of the price over each threshold, and not on the entire purchase price.

Under Fine Gael's proposals, the first EUR100,000 would be zero rated, the next EUR350,000 would be paid at 5%, and the balance would be charged at 9%.

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