Fergal Browne (Fine Gael)

I challenge the Minister of State to indicate where fairly good properties can be purchased for less than €300,000 without people being obliged to move to outlying areas of Dublin. Stamp duty on second-hand houses should have been abolished for all first-time buyers. That would be a sensible approach. However, we welcome the fact that the Minister of State has, in principle, adopted a Fine Gael idea, namely, our suggestion in April that stamp duty on second-hand houses worth less than €400,000 be abolished for all first-time buyers, although the steps taken in the budget do not go far enough. According to the Minister of State's figures, the average price paid for new houses by first-time buyers in the capital was €308,000 in the second quarter of this year. With prices rising at approximately 1% per month, that average has already breached the level of €317,500 set in the budget. This means that young Dubliners struggling to get on to the property ladder may still be forced to move further away from the city — including to places such as Mullingar and Carlow — to find a home.

The measures taken in respect of stamp duty were minimalist at best and totally failed to address issues such as the need to free up the supply of larger houses by reducing stamp duty for those seeking to trade down. This is a major issue because people are living in houses which are far too big for them and which they cannot maintain. These people wish to trade down but they will be penalised by the draconian stamp duty regime if they do so.

Fine Gael urges the Government to go that little bit further and adopt its three-point plan for first-time buyers. The first step in this plan is the introduction of a house deposit savings scheme, similar to the SSIA scheme, to help young people who are saving for deposits for new homes. Under the scheme, first-time buyers would receive €1 for every €3 they save, provided those savings are used for a deposit on a house. No tax on interest will apply and the recipient must show regular monthly savings for a minimum of two years. The scheme will operate for both new and second-hand houses

The second step is the abolition of stamp duty on second-hand homes up to a value of €400,000 bought by first-time buyers. This would mean that a first-time buyer purchasing a second-hand home costing €325,000 would save €14,625. The third step is the front-loading of mortgage interest relief for first-time buyers during the first seven years of the lifetime of a mortgage. This would provide these people with assistance when they most need it.

We welcome the Bill. However, much more work remains to be done in the area of housing. The Government's record in this area is particularly bleak. I was canvassing in Kildare during the recent by-election campaign and, if I recall correctly, there is a waiting list of over 4,000 in Naas. That is a startling statistic. We are co-operating fully with the passage of the Bill in recognition of the major problems that exist. However, to borrow a phrase, much more needs to be done.