Legislation to allow for the abolition of stamp duty for first-time buyers has been published by the Minister for Finance Brian Cowen.
The Finance (Number 2) Bill 2007 - which has been approved by Cabinet - provides a stamp duty exemption for a first-time buyers of a house or an apartment on all purchases on or after March 31st of this year.
Brian Cowen
Mr Cowen said he intends to have the Bill enacted before the Dáil summer recess in two weeks' time.
He said the legislation implements the commitment, contained in the programme for government agreed with the Greens and the Progressive Democrats.
"It will apply to instruments executed on or after March 31st 2007 and where stamp duty has been paid in respect of such an instrument before the Bill becomes law, a provision has been included to allow for a repayment of that duty," he said.
Under the current regime, a first-time buyer is liable to pay stamp duty on a house or an apartment exceeding €317,500.
Up to the value of €381,000 the rate is 3 per cent, between €381,000 and €635,000 it rises to 6 per cent and over €635,000 purchasers must pay the Revenue 9 per cent of the value of the property.
Under the proposed legislation, these first-time buyers rates will be reduced to nil provided the new or second-hand property is the sole or principal residence of the purchaser.
Stamp duty rates for non-first-time buyers, which remained unchanged, kick in at 3 per cent on purchases above €127,000 and rise in a scale to 9 per cent on properties over €635,000.
People who rent out new or second-hand properties are considered "investors" by the Revenue and are liable to the same rates as non-first time owner-occupiers.
A Department of Finance spokesman told ireland.comthat the Government also intends to raise the ceiling on mortgage interest relief for first-time buyers in Budget 2008.
The relief will be raised from €8,000 to €10,000 for single people and from €16,000 to €20,000 for couple back-dated for seven years as pledged in the programme for government, he said.
