Taoiseach Bertie Ahern seemed to signal his support yesterday for the pledge by the Progressive Democrats to reform stamp duty before the Dáil summer recess, if Fianna Fáil and the PDs are returned to government.
Mr Ahern told reporters yesterday: "The concept of doing it in the summer and not waiting until the budget makes sense".
Earlier, Tánaiste Michael McDowell committed the PDs to abolishing stamp duty for first-time house buyers and introducing bands to make the system fairer. He said if his party returned to government the reform would be implemented with immediate effect to ensure market stability.
"There will be no phasing-in period. We will do this through legislation enacted before the new Dáil rises for the 2007 summer recess," he said.
The Opposition leaders poured scorn on Mr McDowell's pledge. "I'll challenge him now, if he's serious about his stamp duty proposals, Fine Gael and Labour will facilitate him next week in the Dáil to change stamp duty. If he has that much clout over this Government, let's do it next Tuesday and Wednesday in the Dáil," said Fine Gael leader Enda Kenny.
Labour leader Pat Rabbitte also attacked the Tánaiste, saying he had had five years in office to change stamp duty but had not done it. He added that in any case what Mr McDowell said now was irrelevant as he would not be back in government. Fine Gael and Labour have pledged similar stamp duty reform as a priority but have refused to give a timetable.
Minister for Finance Brian Cowen refused to be drawn on the PD plan and said he did not want to take any action that would disrupt the property market. "If you look at everything I've done in the past it has been geared towards the first-time buyer," he said.
He would not say whether Fianna Fáil would unveil a stamp duty proposal before the general election. Mr Cowen was in Berlin to attend an informal meeting of finance ministers.
Speaking at his press conference to launch the PD economic policy document Sustaining Success, Mr McDowell said he had discussed the issue with Mr Cowen and he shared his view that a pledge to change the stamp duty regime without a clear timetable would be destructive of the property market.
"I am operating on the basis that Brian Cowen means what he says, that it would be wrong to prolong uncertainty for any period. I believe there is a willingness across the two parties in Government to address the matter sooner rather than later.
"I speak for the PDs and Fianna Fáil will speak for themselves. I cannot force their hand but I am absolutely confident that the package should be introduced before the Dáil goes into recess for the summer," the Tánaiste said.
He said the PDs had come up with their proposals last autumn, Fine Gael and Labour had come up with their plan and Fianna Fáil might well come up with proposals before the election. Mr McDowell refused to say whether acceptance of stamp duty reforms would be a precondition for entering into another coalition with Fianna Fáil.
The PD plan involves the abolition of stamp duty for first-time buyers and the banding of the rates so that house buyers only pay the higher rate on the proportion of the price over each threshold.
The other key commitments of the PD economic manifesto are a reduction in the higher rate of income tax to 38 per cent and the lower rate to 18 per cent. The tax bands will be widened so that a couple, both earning, can earn at least €100,000 and only pay income tax at the standard rate, while a single worker would earn €50,000 and only pay at the standard rate. A married couple with one earner could earn up to €59,000 and only pay tax at the standard rate.
