Will stamp duty relief be applied to property tax?

Q&A: What happened to the stamp duty relief which was supposed to be applied to property tax? It seems to have quietly dropped away.

I bought a house in 2004 on which I had to pay stamp duty of about €44,000. For work reasons I needed to move to Dublin in 2006, so I sold up and bought again, this time paying about €78,000 in stamp duty.

I also had to pay stamp duty on the mortgage.

While it was called stamp duty, it was treated by government and understood by the population in general to be property tax, front loaded. Most people who paid it during the boom years needed to borrow to pay it, so like me they will be paying it back for another 20 to 25 years.

I now owe my mortgage to an institution owned by the State (EBS) which refuses to pass on cost savings based on the lower interest rates created by recent ECB reductions. I currently pay around €600 per month to service this debt I took on to pay stamp duty (aka property tax) as part of the monthly mortgage repayment of €3,600.

As far as I am concerned I paid property tax in advance and in full when I bought my house(s). It is absolutely appalling that I will now have to pay property tax again when I and many others like me are still paying off the money borrowed to pay the tax at the time of purchase. Are any stamp duty reliefs contemplated in the current planned property tax legislation?

Mr EC, Dublin

You are far from alone in your position. There are thousands of homeowners out there who paid massive sums in stamp duty during the early part of the last decade at a time when the then government cynically refused to reform stamp duty despite it being clearly far removed from its original intent.

Quite simply, the money involved was too great. All the more so as successive governments had become hooked on the notion of using once-off tax receipts – such as stamp duty in a property boom – to put in place programmes that required annual spending in good times and bad.

If the Government acknowledged the injustice of the stamp duty situation, it would have been obliged to find alternative sources of funding. That would necessarily have involved some form of property tax and – at least until the strongly persuasive hand of the troika was on the tiller – no government has had the political courage to put in place this much fairer system of property taxation.

Now that we are finally forced to countenance property tax, the Government continues to dither, suggesting that no decisions have been made on its form just weeks before it is due to be introduced. In lieu of leadership, we have instead kite-flying which, at times borders on the reckless.