Alan Shatter (Dublin South, Fine Gael)

This Bill could be described as a minimalist measure. I support the proposed amendment.

The real problem with stamp duty, as it has now developed, is that it has become an unfair tax. We have learned in this House down through the years that if we ignore an unfair tax, difficulties are created. I do not believe the reform proposed by the Minister will resolve the difficulties in the housing market created by the barriers which stamp duty pose.

I welcome that the Minister is providing relief for first-time home buyers. However, I agree with Deputy Burton that we are now in the anomalous position whereby a person who has lived in rented accommodation and not purchased a residential property and succeeds through business in becoming wealthy or wins the national lottery will be able, as a first-time buyer, to purchase a house worth €3 million and not have to pay any stamp duty.

This issue needs to be addressed by the commission simply because the Minister has turned his face against any other amendments to this particular inequitable duty. Clearly, we do not have the numbers in this House to succeed with the amendments which will be discussed later.

The reality is that an elderly retired couple living in Dublin in a relatively modest semi-detached home worth €900,000 to €950,000 wishing to downsize to an even more modest home or apartment worth in the region of €500,000 to €600,000 will be penalised by the State to the tune of 7.5%. It is not possible to buy a reasonable sized apartment in south Dublin for less than approximately €500,000. It is practically impossible to buy anything for less than that amount. There is no reason a retired individual, an elderly individual or an elderly couple wishing to downsize should be penalised by having to pay €35,000 to €60,000 in stamp duty. A fairer system, if stamp duty is imposed, would require those moving home to pay stamp duty on the difference between the moneys realised from the sale of the home and the cost of the new house being purchased. Also, where a person downsizes and purchases a smaller home, stamp duty would not apply.

The problem with the Minister's proposal is that for many of the elderly their homes are their only investments and they see the difference between the sale price of their home and the purchase of smaller homes as providing them with some security for the future, but the State will relieve them of €40,000 to €60,000 of that sum. Stamp duty is an unfair tax in that context. It is equally unfair that young married couples who are trapped in small apartments and wish to trade up are given no relief by this particular measure.

I support the amendment. I know this issue will be discussed in greater detail later. If a commission on taxation is to look at this matter, I suggest that it be looked at inventively. Is there any reason stamp duty, which amounts to an enormous sum, should be paid in one payment? Should an instalment system be available as an alternative where, for example, added interest could be paid if one chooses to pay by instalment? Many people would find it much easier to move home if stamp duty could be paid on an instalment rather than on a once-off basis. No thought has been given to that.

We will have to return to this issue at a future stage. This legislation will lead to movement in the housing market with regard to first-time home buyers. However, we must also encourage elderly and retired people who want to trade down to do so and make available existing housing stock for married couples with children who are seeking to trade up. The barrier which stamp duty creates for such elderly people will not be removed. That issue must be addressed.

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