Fianna Fáil will reform stamp duty if re-elected, Taoiseach Bertie Ahern has confirmed at the unveiling of the party's manifesto in Dublin this morning.
PD leader Michael McDowell
He said the party would abolish stamp duty for first-time buyers and that this commitment would be backdated and applicable to all contracts stamped from last Monday, the 30th of April.
The party also promised to increase the mortgage interest relief for first-time buyers and those who have purchased their homes in the last seven years. Under this proposal, a single person could avail of a maximum €2,000 relief and a couple or widowed person would be entitled to a maximum of €4,000.
"We will help young people to buy their first home by legislating immediately to abolish stamp duty for all first-time buyers," Mr Ahern said in Dublin's Mansion House
Mr Ahern said the elimination of the tax would not force an increase in the price of houses, adding: "We are determined to help first-time buyers directly and substantially without disturbing market conditions, driving increases in house prices and putting the more than 260,000 construction jobs at risk."
Yesterday Mr Cowen attacked Opposition proposals on stamp duty, claiming they were destabilising the market; he said Fianna Fáil would introduce measures to stabilise it today.
Asked why the party had "U-turned" on their stamp duty policy on the fifth day of the election campaign, after Minister for Finance had ruled out such a move a week ago, Mr Ahern said Mr Cowen had always said Fianna Fáil would not make commitments about stamp duty "way out" from an election campaign because they would have created instability in the housing market.
Tanaiste and PD leader Michael McDowell, who first raised the stamp duty issue, said he believed reform was "essential" but was "not in the position of scoring points off anybody."
However he said couples wishing to trade up to accommodate larger families would still be punished under the Fianna Fáil proposal.
"We are talking about coping class people on dual incomes with a lot of issues to deal with," Mr McDowell said.
"They have to pay the equivalent of the average industrial wage as an additional tax burden for moving house in very modest circumstances.
"Simply to say you're just going to leave clear the pitch for first time purchasers but leave a crippling and unfair tax burden on ordinary couples in very real life situations is unfair and unsustainable and does serious damage property market."
Fine Gael described Fianna Fáil's promise to reform stamp duty if returned to power as a "desperate attempt to cling to power".
The party's deputy leader Richard Bruton said in response to the announcement this morning: ""Who does Fianna Fail think they're kidding? Their stamp duty proposal is an absolute joke. After weeks of relentlessly attacking Fine Gael-Labour's stamp duty reform policy, FF today showed that their words and promises mean nothing.
"Finance Minister Cowen went so far last week as to say: 'there is no way Fianna Fail is going to get involved in this auction….It is not going to happen.' Moreover, Housing Minister Ahern just last week said: 'This talk about doing away with stamp duty is not relevant and not just.'
"People will undoubtedly see today's Fianna Fáil u-turn for what it is: a desperate attempt to cling to power by a dying regime. After feeding at the overflowing trough of stamp duty for 10 long years, Fianna Fáil must have little regard for the intelligence of the Irish people if they think anyone will believe them now.
Labour's finance spokeswoman Joan Burton said the Fianna Fáil decision to abolish stamp duty for all first time buyers, regardless of the value of the house, will be of huge benefit to the super rich.
"While the Labour Party manifesto proposal on stamp duty was carefully drafted with a view to assisting hardworking families trying to enter the housing market, the open ended Fianna Fail proposal will provide a huge windfall for the super-rich," she said.
"It is now very clear that he entire Fianna Fail stamp duty package was cobbled together at the last minute in a desperate attempt rescue a campaign that is already in danger of going down the tubes."
Minister for Finance Brian Cowen responded to the criticism by saying Fine Gael and Labour's plans provided five years of uncertainty and directly undermined efforts to help first time buyers.
Sinn Féin leader Gerry Adams described the move as "subterfuge" and said house developers would just raise the price of houses in response.
The Taoiseach also said today that if Fianna Fáil was returned to power, the party would reduce personal taxes, improve pensions, employ teachers to reduce class sizes, increase Garda numbers by 2,000 and improve health services.
The Taoiseach said Fianna Fáil's tax and PRSI plans were focused on low- and middle-income workers and their families who, he claimed, had been largely ignored by Fine Gael and Labour.