20 March 2007

Finance

 Stamp Duty

Ciarán Cuffe asked the Minister for Finance if the Government plans to exempt older persons trading down their property, from stamp duty; and if he will make a statement on the matter.

Minister for Finance (Mr. Cowen):
If tax concessions were introduced for persons wishing to trade down, it would have the effect of increasing the supply of larger (and generally more expensive) houses. This would be of benefit to people at the top end of the market. However, the demand for property at the lower end of the market would increase as the older person trading down sought a smaller house and this would adversely affect first-time buyers in particular, who would have to compete for such houses with a larger number of purchasers.

Anyone that sells their principal private residence is exempt from capital gains tax. If the house has been occupied for the full period of ownership, full exemption applies. Otherwise, the relief granted is in proportion to the period of occupation over the entire period of ownership. This relief is of very significant benefit to the taxpayer and would facilitate people with large homes trading down.