Martin Mansergh (Fianna Fail)

I have every sympathy for the first-time buyer involved but he was very badly advised by his estate agent if he was not made aware this would be the consequence. Given that the parties were so close, it should have been a matter of negotiation to keep the price below the €317,500 threshold. While I am sure Senator Hayes is doing the public a service by warning people of the consequences, this happens whenever there is a threshold or limit for anything.

On the more general issue raised by the amendment, it needs to be stressed that in the majority of the country, the price of very good new and second-hand houses is well below the generous limit of €317,500. I accept there is an issue, particularly with regard to Dublin, where a proportion of houses would fall above the limit. I have a daughter who recently bought a house not too far from the centre of Dublin which was slightly above that price.

The questions that need to be asked about this proposal or any of the proposals relating to the housing market is where is the real incidence and who will be the real beneficiaries. If the effect of raising the limit is simply to raise the price of houses by an equivalent amount, the first-time buyer will not be any better off. Until recently, the market was so heated this would be the consequence. The €317,000 threshold is pretty generous considering the system operating in other countries where the thresholds for stamp duty are significantly lower. Senator Terry's proposal would be a very expensive measure. The State must collect revenue from somewhere because there are constant demands for improvements to infrastructure for schools, roads, etc. We do not have a property tax, but almost every other country has an annual one. Seriously diluting stamp duty taxes would not be in the long-term interest. If there are tax concessions to be made, should they be made in the area of stamp duty?

What I least understand about the Fine Gael proposal is its stance on older people selling houses. Older people have seen an enormous increase in the value of their houses, often 1,000% or more over the past 20 to 30 years. I find it hard to accept the idea that the stamp duty paid by the buyer will somehow deter older people from selling or transferring their houses. The area about which I have moral reservations is something about which few of us have any control, namely, the redistribution of wealth to the older generation because of the enormous increase in the value of property, especially since approximately 1970 but very much accelerated since the mid 1990s. I do not even begin to understand the idea that one should make any tax concessions to people who have already gained enormously or what moral basis there is for that suggestion.