Paudge Connolly (Cavan-Monaghan, Independent)

I welcome the opportunity to speak on the Bill. It is characterised by an approach of tweaking and tidying up by the Government prior to the adjudication of its stewardship in a few months. The Bill's main function will cover the implementation of the tax changes in the budget and make adjustments to tax credits and bands. It will make a rather tentative effort at tax reform.

In recent years foreign property has been attracting Irish investors who have ploughed huge sums into holiday homes in locations as far-flung as Shanghai and the Bahamas. The revamp of the business expansion scheme would appear to be an effort to counter this major outflow of investment funds in that it improves incentives for investors in the scheme. This is to be achieved by raising the upper limit for investments from €31,000 to a more realistic €150,000 and by doubling the figure for each company from €1 million to €2 million.

In particular, I was very disappointed that there was a failure to countenance any real reform of the stamp duty system and no joy for first-time buyers of second-hand homes. There was much hope there would be real reform in this area but it is regretted that it did not occur. First-time buyers are placed on the horns of a dilemma in that there is no change to the threshold of €317,500, despite the fact that the average price of a home is in the region of €350,000. This is a weakness.

Estate agents have indicated that house prices have risen by upwards of 12% in the past year. County Leitrim has topped the league with an increase of approximately 28%. Nevertheless, the stamp duty threshold remains static, at €317,500, and any prospect of stamp duty reform appears to be a distant dream, as prices continue to reach astronomical levels. Families anxious to trade up will be hit with a double or triple whammy, as they will have to factor an extra €40,000 to €60,000 into their calculations.

One of the most punitive aspects of the unfair stamp duty system is that house buyers are forced to pay the higher rates for the full value of their property, not merely on the small excess above €317,500. If they were to pay the difference between €317,000 and €350,000, the system would be a lot fairer.

Section 97 of the Bill provides a stamp duty tax break for parents who transfer sites up to one acre, or with a value not exceeding €254,000, to each of their children to construct a private residence. I do not know how many "regular" or "ordinary" families would be in a position to do this for their children. The relief is aimed at wealthier families who will benefit a little more as a result.

One stamp duty adjustment that is to be welcomed is the exemption for amateur sports bodies, a matter referred to by Deputy Burton. The Independents have lobbied for such a measure. These voluntary bodies provide many facilities, which is to be welcomed. No doubt the initiative will be very popular throughout Ireland because the vast majority of sports activity is amateur and most clubs strive to have their own premises.

The Bill provides a new set of generous property-linked tax breaks for tourism in a number of midland counties. Known as the mid-Shannon corridor tourism investment scheme, it is designed to stimulate investment in the area. I have no doubt it is an ambitious plan, but there are parts of the BMW region that have been starved of investment. There has been an underspend in large tracts of the region. I should like to see that type of imaginative initiative being examined for the wider region. There are many borderline examples between the standard income tax and the 42% rates. Many would welcome the opportunity to have their pension fund topped by the €2,500 under a transfer of €7,500 from their SSIA account. An alarming figure was released recently by the CSO which showed that 50% of the population does not have any pension cover. There is an opportunity here for us to do something about this. In fact, more than half of SSIA account holders were not regular savers. If the Government matched the pension schemes on a euro for euro basis, many new savers would find this very attractive.

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