Written answers

Thursday, 25 September 2008

5:00 pm

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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Question 91: To ask the Minister for Finance the extent to which inflation has affected the property market in each of the past ten years; the extent to which this affected VAT and other tax receipts; and if he will make a statement on the matter. [31771/08]

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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Question 95: To ask the Minister for Finance the extent to which he or his Department have planned to address inflation in the property market in the future; and if he will make a statement on the matter. [31776/08]

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Dublin West, Fianna Fail)
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I propose to take Questions Nos. 91 and 95 together.

House price inflation was well ahead of the general level of inflation in the economy during the period in question. However, the latest data shows that prices fell 9.9 per cent in the twelve months to August 2008 and that they are around 13 per cent below their peak levels.

The Government has in the past implemented measures to bring stability to the housing market, such as the measures my predecessor took in the last Budget regarding stamp duty and mortgage interest relief. I do not propose to say what I may or may not do in my forthcoming Budget. I have set out in Table 1 the level of house price inflation and the average house price in each of the last ten years. The remaining Tables give details of relevant tax receipts over the same period.

Table 1 – House Price Inflation
YearPrice in December1Property Price Inflation Rate
%
1998121,70229.8
1999143,49017.9
2000174,07121.3
2001181,6974.4
2002205,89813.3
2003234,06613.7
2004254,2158.6
2005277,8529.3
2006310,63211.8
2007287,877-7.3
1Source: permanent tsb/ESRI House price index

Tax Receipts

I have been informed by the Revenue Commissioners that the information available relates to value added tax on new housing, stamp duty on residential property and capital gains tax. The figures available for VAT are the estimated yields from new housing and the maintenance and repair to all housing for the years 1998 to 2007, inclusive. The estimated yield is as follows.

Table 2 — VAT
YearNew housingHousing repair and maintenanceTotal
€m€m€m
1998494217711
1999641289931
20008093321,141
20019273821,309
20021,1003361,436
20031,5413321,873
20041,9403872,327
20052,4054362,841
20062,7275203,247
20072,4245622,986

The figures given for the VAT raised in 2004 are a revision of figures provided previously. The revision was necessitated by more accurate information becoming available in the interim. In the case of stamp duty, the figures available are of the total collected from residential property. The following table shows these figures for each of the years 1998 to 2007.

Table 3 — Stamp Duty
Year€m
1998213
1999263
2000282
2001265
2002349
2003528
2004752
2005945
20061,311
20071,018

The stamp duty figures shown are estimated for 1998 to 2000, inclusive, because the breakdown in the yield figures for property as between residential and non-residential is approximate only for those years. I am also informed by the Revenue Commissioners that a breakdown of Capital Gains Tax by asset type is not available.

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