Brian Cowen (Laois-Offaly, Fianna Fail)

In next December's Budget Statement I intend to increase the ceiling of mortgage interest relief for first-time buyers from €8,000 to €10,000 for single people and from €16,000 to €20,000 for couples or widowed people. This will see single first-time buyers receiving up to €167 in mortgage interest relief directly into their bank accounts every month while couples will receive up to €333 each month in relief. As a result of this initiative for first-time buyers, a couple with a joint mortgage of up to €400,000 over 33 years at an interest rate of 5% will be able to claim interest relief at 20% on the full amount of the interest of their loan. In the case of a single person, the upper limit will be €200,000. I have stated that as income taxes are reduced we will keep the rate of mortgage interest relief at 20% for all home owners.

These changes will help young people and families to purchase their home. They will help them meet the repayments and ensure that the mortgage interest burden does not rise as a result of future income tax changes. Our approach is good for certainty, good for affordability, good for society and good for the economy. These changes will make a direct and substantial difference to young people and families as they strive to own their own homes, not just at the time of purchase but during the early years of home-making.

This matter has been fully debated during the general election campaign and proposals made by the Opposition were not affordable, being costed at approximately €600 million and proposing that up to 45,000 or 50,000 would have a collective benefit of that magnitude which would be paid for by 2.15 million other people. This does not suggest a very equitable way of dealing with tax expenditures.

The Government's proposals are in line with its entire policy approach, being both progressive and responsible. They are the right measures for our economy and our society. By targeting first-time buyers immediately and directly, the proposals in this Bill will have an important impact which is socially equitable and at reasonable cost to the Exchequer and which will not cause unnecessary disruption in one of our most important industries.

The reason I am not introducing other types of stamp duty reform at this time is simple, I am doing what the Government said it would do in the programme for Government. I am exempting first-time buyers from stamp duty in respect of all houses, regardless of whether these are new or second-hand and in doing so I am removing uncertainty about the stamp duty regime which may have arisen during the general election campaign. Taken together, the measures in the Bill, combined with the mortgage interest relief measures in my 2007 budget and those proposed for 2008, provide real and tangible benefit to first-time buyers as they seek to purchase a home.

I ask that the House recommend the Bill as published and passed by the Dáil.