HOUSING MARKET:FINE GAEL byelection candidates George Lee and Paschal Donohoe are seeking to cut stamp duty to 2 per cent in order to kick-start employment in the building sector.
Mr Lee, who is running in Dublin South, said in his former role as RTÉ economics editor, he had been critical of changes to stamp duty rates made by successive Fianna Fáil-led governments.
He said the creation of a 2 per cent rate to replace the existing 7 and 9 per cent rates would not adversely disrupt the housing market at this time.
“One has to be critical of interference with the property market generally in normal circumstances, but these are not normal circumstances. There are 60,000 houses around the country with for-sale signs outside them.”
Mr Lee said he did not believe there were any risks associated with lowering stamp duty now. “It isn’t going to enormously increase house prices at all and it won’t increase house-buying activity that much.”
However, he said some stimulus was needed. It was difficult to say if the bottom of the market had been reached because people were more anxious about buying at the moment out of fear that the Government was going to introduce new taxes on housing in the form of local authority rates.
Senator Donohoe, who is running in the Dublin Central byelection, said the proposal was essentially about job-creation. “Every 10 housing transactions sustains almost eight jobs for a year.”
He said the reduction in stamp duty would not result in any net loss for the exchequer.
But Fianna Fáil TD for Dublin North Darragh O’Brien described the proposal as “at best illiterate, at worst low political opportunism”. “Given the current state of the public finances and the very difficult budgetary decisions that have been made over the last year, how can any party putting themselves forward as fit to govern, propose a change that could cost in the region of €130 million based on current stamp duty yields?”
