Michael Noonan (Limerick City, Fine Gael)

I am also modifying retirement relief from capital gains tax so that it better incentivises the timely transfers of farms and businesses before the current owners reach the age of 66. The approach is in keeping with the policy of my colleague the Minister for Agriculture, Food and the Marine, Deputy Simon Coveney, of encouraging timely transfer of farm assets and improving the age profile of farming. Full details of these measures will be in the Finance Bill.

There is a growing acceptance that greater use of the farm partnership model can not only help to increase scale, but can also help to develop the sector's skill set through attracting more new entrants to the sector. To encourage farm partnership formation, I am introducing an enhanced 50% stock relief for all registered farm partnerships and a 100% stock relief for certain young trained farmers forming such partnerships. Subject to clearance with the European Commission under state aid rules, these reliefs will be made available until December 2015.

Tourism

The creation of a second reduced rate of VAT of 9% and halving the rate of employer's PRSI on jobs with earnings up to €356 per week in the jobs initiative has boosted tourism and stimulated employment.The 9% rate of VAT will also apply to open farms which otherwise would be subject to a higher rate.

It is interesting to note, that the latest live register figures show that 125,000 people leftthe live register to take up employment this year up to the end of October. This shows how fluid the labour market is and also the difficulty with attempting to assign the creation of new jobs to specific initiatives. However, the tourism and hospitality industry believe that the jobs initiative has been very effective in generating additional business.

The Government was disappointed earlier this year when Aer Lingus and Ryanair were unwilling to provide additional flights to Ireland in exchange for the abolition of the air travel tax. This offer is still on the table and while the Government appreciates the contribution to the Irish economy being made by the main carriers, we want them to bring additional tourists into the country and we are prepared to negotiate a new mandate.

At the Global Irish Forum held in Dublin Castle earlier this year, it was announced that 2013 would be the year of the gathering, a year long programme of festivals, events and other gatherings designed to encourage the global Irish to visit Ireland in 2013 and to increase tourist numbers by 325,000. A special allocation will be made in the Revised Estimates Volume early in the New Year and it will be launched on St. Patrick's Day.

All the measures I am announcing for the different sectors of the economy have one objective: to stimulate additional economic growth and to create additional jobs. As well as introducing policies to assist growth, we must also address the constraints on growth. The situation in the property sector at present represents a significant drag on growth throughout the country.

Restoring Property Transactions to More Normal Levels

When the development and construction bubble burst, the consequences were dire. A sector which amounted to around 20% of GDP has been reduced this year to around 5%. A massive hole was made in the Government finances through the loss of stamp duty, VAT, income tax, PRSI and capital gains tax. Even worse, the previous Government neglected the imploding construction sector, which has lost 164,000 jobs since the first half of 2007. We cannot restore all of these jobs and the industry will never go back to 20% of GDP. However, we can create the right conditions for construction employment to return to normal sustainable levels.

The absence of activity in the property market and the decline in house values are having a negative effect on the domestic economy. When the value of family homes is going down, even those with good incomes and without debt, tend to save rather than spend or invest, and consumer sentiment, albeit improving of late, will be affected by this.

All successful economies have a strong construction and development sector and a sustainable property sector. The Government has already announced a multiannual capital budget of €17 billion and I am now announcing the following measures to restore some confidence and to renew activity in the construction, development and property sectors.

The stamp duty rate for commercial property transfers will be reduced from the current top rate of 6% to a flat rate of 2% on all amounts from midnight tonight in respect of all non-residential property, including farmland as well as commercial and industrial buildings. Bringing down the cost of acquiring commercial property will have a positive effect on the property sector and indirectly on jobs in construction and related activities. The current stamp duty arrangements for residential property will continue to apply with 1% on transactions up to and including €1 million and 2% thereafter.

I am also introducing a capital gains tax incentive for property purchased between midnight tonight and the end of 2013. If a property is bought during this period and held for at least seven years, the gain attributable to that seven year holding period will be relieved from capital gains tax.

NAMA Rent Reviews

I am fully aware of the difficulties that upward only rent reviews are causing for some businesses. Despite exhaustive work in recent months by my colleague the Minister for Justice, Equality and Defence, Deputy Alan Shatter, including the preparation of draft legislation, it has not proved possible to develop a targeted scheme to tackle this issue that would not be vulnerable to legal challenge or require compensation to be paid to landlords. I do not believe the Opposition would want us to compensate landlords for any losses in their rent.

This is a matter of particular interest to NAMA which must deal with the problems caused by upward only rent reviews which apply to NAMA properties. NAMA advises me that it has a policy guidance for dealing with tenants' difficulties arising from upward only rent reviews, which it has agreed to publish today. The NAMA policy guidance provides an opportunity for NAMA to approve rent reductions where it can be shown that rents are in excess of the current market levels and viability is threatened. The policy also provides for the appointment of an independent valuation of market rent where necessary. NAMA has also advised me that where a tenant is not getting satisfaction in negotiations with his NAMA landlord, he can contact NAMA directly and it assures us that any queries will be dealt with speedily. I welcome NAMA's realistic approach to this difficult issue. Now that NAMA has acquired €74 billion worth of property, it can be seen this arrangement will have widespread implications.

Mortgage Interest Relief

The Government is committed to helping address the problems faced by those who bought homes at the height of the property boom, between 2004 and 2008. Therefore, I am going to fulfil the commitment in the programme for Government to increase the rate of mortgage interest relief to 30% for first time buyers who took out their first mortgage in that period.

I also confirm the decision made by my predecessor that mortgage interest relief will no longer be available to house purchasers who purchase after the end of 2012 and will be fully abolished from 2018. For those who wish to buy a home in 2012, I am providing today that: first time buyers will get mortgage interest relief at a rate of 25%, rather than the 15% proposed by the previous Government; and non-first time buyers will benefit from relief at 15% rather than the reduced rate of 10% proposed by the last Government. Any young couples listening to me who are thinking of buying a home will have increased mortgage interest relief if they purchase in 2012 -----

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