The rate of mortgage interest relief for non-first-time buyers is to be reduced from 20 per cent to 15 per cent next year, the Minister for Finance Brian Lenihan has announced.
The change will fund an increase in the current rate of mortgage interest relief for first-time buyers which will rise from 20 per cent to 25 per cent in year one and year two and to 22.5 per cent in years three, four and five.
The current rates of stamp duty on residential property are to be left unchanged.
Mr Lenihan has decided to raise €40 million by imposing €200 levy on the owners of all private rented accommodation, holiday homes and other non-principal residences.
The charge will be levied and collected by local authorities, and will be used to support the provision of local services.
Mr Lenihan also announced that the top rate of stamp duty on commercial property is to be increased from 9 per cent to 6 per cent.
This is to be funded by through an increase of 2 per cent in the capital gains tax rate, he said.
Mr Lenihan said the move was aimed at rebalancing capital taxes. He said stamp duty on commercial properties and capital gains tax on such transactions were currently imbalanced.
“This imbalance does not apply to residential property because the Principal Private Residence exemption means there is no Capital Gains Liability in such cases,” he said.