The Government's stamp duty regime is blocking young families from buying bigger homes, according to a leading figure in the auctioneering business. Barry O'Halloranreports.
Robert Ganly, president of the Irish Auctioneers and Valuers' Institute (IAVI), said yesterday that because of the price of homes in big population centres like Dublin, young couples have to borrow as much as €72,000 extra if they want to buy a house.
"That's a lot of money if you're paying it back over 30 years," Mr Ganly said.
In a speech published to coincide with the IAVI's annual lunch in Dublin yesterday, Mr Ganly said that stamp duty was a tax on hope because it prevented young families from trading up to bigger homes.
He accused Minister for Finance Brian Cowen of "lacking the courage of his predecessors" in failing to reform the tax.
"In this country we have 11 separate rates of stamp duty, depending on the type of property and the circumstances of the buyer," he said.
"Streamlining the system, having a maximum of four rates with a top rate of 5 per cent - which is 1 per cent higher than in the UK - would dramatically increase the number of transactions and would benefit the exchequer in the medium term."
Mr Ganly, a partner with auctioneering firm Ganly Walters, argued that when the Government cut capital gains tax from 40 per cent to 20 per cent, the revenue from it increased because it sparked more transactions.
"At the moment, the property market is in danger of stagnating, and given its importance to the Irish economy, it's astounding that the Minister is treating the issue in such a dismissive way."
He also accused national broadcaster RTÉ of being irresponsible for airing an episode of current affairs show Prime Time dealing with unethical practices engaged in by some auctioneers.
"In the aftermath of the airing of the programme, IAVI members around the country, and the vast majority of other auctioneers, who are honest, decent, trustworthy business people, suddenly found consumer confidence in them and the entire property sector shaken," he said.
Gerry Burke, head of global property finance at Bank of Ireland corporate banking, said the outlook for the Irish and global economies looked healthy. "The underlying demand for housing is still strongly evidenced by the abnormally high increase in rental income this year of the order of 12 per cent," he said.
