Madam, - I was amazed to read in your edition of September 20th that the annual stamp duty tax raised by the Government from first-time home-buyers is a mere €70 million. Given that this imposes such a severe cost on first-time buyers for such a small return to the Exchequer, it's a wonder this tax hasn't been abolished already.
I welcome the current debate and think it is long overdue. I suggest that the Government should, sooner rather than later, consider the following changes:
1. Abolish stamp duty altogether for first-time buyers of residential property (either new or second-hand).
2. Introduce a credit system on principal private residences for those who have already paid stamp duty on their homes - i.e., allow people who wish to trade up to reduce the stamp duty bill on their new home by the amount of stamp duty they paid on their old home when they bought it.
The advantages of this system are several:
1. It does not discriminate against those who have recently bought a home and already paid stamp duty - they will be able to reduce their stamp duty costs in the event they wish to trade up later.
2. It taxes the investor more heavily than someone who wishes to buy a principal private residence as the investor will not benefit from the credit system.
3. It taxes more heavily those who bought their principal home many years ago, benefited from the huge rise in house prices, has built up enormous and now wants to move on. Their tax credit will be small relative to the stamp duty payable on a home today.
It is possible that the Exchequer will gain from such initiatives as as they would encourage people to trade up more frequently. - Is mise,
TREVOR LYDON,
Clontarf,
Dublin 3.
Madam, - If stamp duty were abolished, the price of houses subject to stamp duty would undoubtedly rise, but this would not be a bad thing for most buyers and private sellers in the housing market. The purchaser's gross cost will at worst remain unchanged and the need for substantial savings to cover stamp duties will disappear. Those selling will benefit from increased prices and in certain sectors from a larger market for their homes. The dubious equity position of recent purchasers will improve and the likelihood of a hard landing will recede a little.
Add to this improved mobility in the marketplace and the case seems compelling. Concerns regarding tax revenues show a remarkable lack of imagination. Those who pay stamp duty are subsidising the taxpayer. There more equitable ways to distribute the load, and the Government has the legal and political capacity to do so. - Yours, etc,
STEPHEN BARRETT,
Abbeyleix,
Co Laois.