Jim O'Keeffe (Cork South West, Fine Gael)
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Question 112: To ask the Minister for Finance the average take to the Exchequer from each new house which is built; and if he has proposals to encourage an increase in house building in view of the present downturn. [21944/08]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I am informed by the Revenue Commissioners that, generally speaking, the direct yield of taxation to the Exchequer on the sale of new houses relates to VAT which is charged at the reduced VAT rate of 13.5%.

According to the Department of the Environment, Heritage and Local Government statistics, the average price of a new home in 2007 was €322,634. The amount of VAT included in that price would be €38,375.

Regarding stamp duty, the yield from residential stamp duty arises mainly from the sale of second-hand houses. New houses purchased by owner occupiers are exempt from stamp duty where the floor area is less than 125m2 . In the case of larger homes, the stamp duty is computed on the greater of the site value or a quarter of the property value exclusive of VAT. However, in the case of investors purchasing new houses, stamp duty is applied at the same rate as that charged on second-hand houses. First-time owner-occupying purchasers of new or second-hand residential property are exempt from stamp duty.

The Government and its agencies have worked to support a level of housing output that meets market demand over recent years. As a result, more people have been able to purchase a home. The Government will continue to support investment in infrastructure to deliver the required level of housing and improve affordability. The quality and affordability of housing is vital to both the country's social cohesion and its competitiveness.

The level of construction of private housing is ultimately driven by market forces and neither I nor the Minister for the Environment, Heritage and Local Government have proposals at this time to intervene to influence the output of housing.