Written answers

Wednesday, 28 June 2006

Department of Finance

Housing Market Regulation

11:00 pm

Photo of Pat BreenPat Breen (Clare, Fine Gael)
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Question 41: To ask the Minister for Finance his views on recent observations by the president of the ECB on the role of the Government in the housing market here; and if he will make a statement on the matter. [24894/06]

Photo of Brian CowenBrian Cowen (Laois-Offaly, Fianna Fail)
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I noted the ECB president's comments. As I have said in previous replies to questions, the Government is doing its part by continuing to run a prudent, stability-oriented budgetary policy which gives us room for manoeuvre in the event of an economic downturn, whatever the cause. We are not borrowing to fund our planned major infrastructural investment programme and this investment will help sustain future growth.

In addition, I announced in Budget 2006 that a range of specific property-related tax incentive schemes were to be discontinued, on foot of a comprehensive review of the schemes undertaken by independent consultants in the course of 2005. In line with the recommendations of the consultants, the 2006 Finance Bill provides that the tax schemes in question, several of which include a significant housing component, will be discontinued on a transitional basis, with full tax relief available for qualifying expenditure in 2006, and with decreasing levels of relief available in 2007 and in the period from January to end-July 2008, after which the relief will not be available. The gradual phasing-out of the tax relief schemes is designed to avoid any sudden shock to the construction sector generally, having regard to the important contribution of this sector to Irish economic growth at present.

Finally, individual borrowers and lenders should be aware of their own responsibility and the need to be sensible in the housing market.

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