Fine Gael and Labour have promised to introduce radical changes to the stamp duty regime if elected to government - including the abolition of the tax for first-time buyers on houses up to €450,000 - "as a priority" and "in one fell swoop" when budgetary conditions are right.
The reform proposals, and the failure of the parties to commit to a definite timeframe for the introduction of the changes, were criticised last night by the Minister for Finance Brian Cowen, who described them as "daft", and a "pure fudge" that would create uncertainty for up to five years in the property market.
The parties' joint election economic document, published yesterday, promises that house purchasers other then first-time buyers would pay no stamp duty up to €100,000, 5 per cent on the next €350,000 and 9 per cent on the balance.
While Fine Gael originally announced last month that it would introduce the changes within three years, the parties yesterday refused to commit to a timeframe other than saying it would be decided by a future cabinet based on "prevailing circumstances". It is understood the lifting of the three-year timeframe came following pressure from Labour who were concerned about the effect of the proposal.
Mr Kenny said at the launch of the policy Protecting the Progress: An Agreed Agenda on Tax and Jobs that Fine Gael and Labour want a change in the stamp duty regime and Fianna Fáil do not. "We will do it as a priority, as a single entity. We are not in the business of either stagnating or stampeding the property market. It will happen in one fell swoop when the new cabinet decides . . . based on the prevailing circumstances."
The economic plan outlined tax changes costing €3.4 billion gross over the five years of government. It proposes a reduction in the bottom rate of tax to 18 per cent and what the parties described as "family friendly" tax policies designed to row back on individualisation. These changes include increasing by €5,000 the level at which one-income, married couples hit the top rate of tax and an increase in the home carers' credit to the level of the PAYE credit.
The economic document, which the parties say is based on a conservative estimate of economic growth of 4.2 per cent in real terms over five years, also promises: to maintain the 12.5 per cent rate of corporation tax and the current rate of capital gains tax; a 25 per cent cut in the regulatory red tape on companies and a review of the government's decentralisation plan including reversing the plan to move core policy units out of Dublin.
Meanwhile, the Progressive Democrats will today also promise the abolition of stamp duty for first-time buyers and "banding" rates so that owner-occupiers pay the higher rate only on the portion of the price over each threshold when it publishes its election economic policy.It will also promise a reduction in the higher rate of the tax to 38 per cent, and the lower rate to 18 per cent in the lifetime of the next government.
Other changes expected in the policy would allow a single worker to earn €50,000 and only pay income tax at the standard rate and tax credits so that couples earning up to €40,000 will pay no income tax. This would mean that a single worker could earn €20,000 and pay no income tax.
At yesterday's launch Fine Gael leader Enda Kenny said for the first time in 10 years people will have a clear choice for change and a reason to change.
He said it was unprecedented for two parties to come together and agree an agenda in a key area such as the economy.
Labour leader Pat Rabbitte said the parties are committed to changes in the key areas of health, crime and the approach to the economy.
Maintaining a prosperous, enterprising economy is the basis to maintain the improvement in quality of life for people, he added.