Mary Harney (Dublin Mid West, Independent)

The Commission on Taxation recommended that we substantially lower the rate of stamp duty but broaden its base and the Minister clearly took that on board in his budgetary decision to make the rate 1% or 2%. I am trying to remember what the previous higher rate applied to; I believe it was €655,000. The first €125,000 had a zero rate, the next €875,000 was at 7% and for a price higher than that the rate was 9%. As I understand it, when one went over that price one paid 9% on everything. I remember during the last election, which seems such a long time ago, my colleague suggested that instead of jumping from 7% to 9% and paying 9% on everything that the rate be tiered. The situation may have changed even since then. At the time we were running enormous surpluses, as everybody knows.

The idea now is that everybody will pay something, either 1% or 2%, which is reasonable. In order to broaden the base there are to be no exemptions, including for new houses or lower-priced second-hand houses. It is not a prerequisite for a property tax but will provide key information and a data base in regard to site and property values which we have not had before. I have no doubt that such a database will be important in informing all of us about the upcoming site valuation tax which is mentioned in the four year plan.

Deputy Rabbitte raised the issue of DIRT. As I understand it, there are differences in products sold by insurance or investment holding companies, such as collective investment undertakings where interest is not paid on an annual or fixed basis but is rolled up and paid infrequently or on the maturity of the investment. When I asked if the 30% rate equates with the 28% rate on deposits and savings accounts where interest is paid frequently I was advised it is not scientific but is as close as possible to equating the two situations, as between-----

See this speech in context