Richard Bruton (Dublin North Central, Fine Gael)
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Question 153: To ask the Minister for Finance the percentage increase and decrease in the volume of new house sales, new house prices, second hand house sales and in the price of second hand houses that underpin his Department's tax Estimates for 2007 published in the pre-Budget outlook statement. [39865/06]

Brian Cowen (Laois-Offaly, Fianna Fail)
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In estimating the Pre-Budget Outlook 2007 tax projection, my Department forecast a volume decrease of -1.0 per cent in new house output for 2007. A new house price increase of +5 per cent was also forecast. These new house volume and price growth estimates are subject to change in the Budget 2007 tax forecasts.

There are no reliable macro economic indicators currently available which detail activity in the second-hand housing market, from which the bulk of residential property related Stamp duty receipts are derived.

Accordingly, the forecast changes in the volume and price of new house activity are used as a general proxy for the change in the level and value of stamp duty liable transactions for second-hand houses. Added to this is an adjustment for the consequential movement into the higher stamp duty bands brought about by the projected increase in new house prices.

Clearly, such forecasts are susceptible to a far greater margin of error than other economic variables such as forecasts of employment, income and consumption.