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Cowen Introduces Stamp Duty Cut To Irish Parliament

by Jason Gorringe,, London

28 June 2007

Irish Finance Minister Brian Cowen has told the Dail that the Finance (No 2) Bill will help to cool speculation in the country's housing market by cutting stamp duty for first time home buyers.

"The proposals (the bill) contains are timely, are affordable, are targeted and will support one of the most important sectors of our economy. It will do all this in a way which directly assists those without any housing equity of their own in their efforts to acquire their first home," Cowen stated whilst introducing the bill on Wednesday afternoon.

“I have always supported home ownership through targeted policy initiatives and these proposed changes mark a continuation of a process of support for first-time buyers which I put in place in my first budget. Our proposals are good for the property market as a whole as they bring an end to the speculation and uncertainty about the evolution of the policy in this area. In addition, by making these changes retrospective on transactions executed on or after the 31st March, we have minimised the potential for market disruption," he added.

Cowen explained that where a person who has paid any stamp duty becomes entitled to an exemption from that duty when the bill is enacted, they will be entitled to claim a repayment of that duty from the Revenue Commissioners.

The Revenue Commission is expected to publish guidance on how such monies can be reclaimed in due course.

"Our policy initiatives are designed to help young people and young families, not just those who are about to buy their first home, but all those who have purchased apartments and houses in the past seven years. They will improve affordability, reduce the burden of higher interest rates and have a positive social impact," announced Cowen.

In the next budget, due to be aunveiled in December, Cowen has said that he will increase the ceiling of mortgage interest relief for first-time buyers from EUR8,000 to EUR10,000 for single people and from EUR16,000 to EUR20,000 for couples or widowed people. As a result of this initiative, a couple with a joint mortgage of up to EUR400,000 over 33 years at an interest rate of 5% (single person EUR200,000) will be able to claim interest relief on the full amount of the interest on their loan.

"As income taxes are reduced, we will keep the rate for mortgage interest relief at 20% for all home owners," Cowen stated.

He concluded that:

“These changes will help young people and families to purchase their first home, it will help them meet the repayments and it will ensure that the mortgage interest burden does not rise as a result of future income tax changes. Our approach is good for certainty, it is good for affordability, it is good for society and good for the economy.”

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