Stamp Duty Debate

Whether he does or not is irrelevant to a great extent. The issue of concern is whether the market picks up post budget or not. If it doesn't, then it wasn't the stamp duty issue that was keeping the lid on it, and we are on a slide.
 

I agree and I'd also add those who wish to downsize as children leave the nest. Often when faced with buying a much smaller property they are finding that the stamp duty liability eats into what should have been a retirement fund. Quite a few of my acquaintance have decided to stay put because of this.
 
beattie said:
And the ones in the past could be justified?
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No I don't believe the price rises of the past few years can be justified but they were sustainable IMO because of low interest rates and the willingness of lenders to supply many, many multiples of the purchasers salaries. Now we have rising interest rates, it's a much less affordable option to buy.
 
Does anybody know when stamp duty on property came into being? I heard today that it was brought in in the early 70s to support Government financing and was only ever expected to be a temporary measure, like so many of our other levies.
 
SD rates are high but to reduce them now would undermine the good that rising interest rates are doing in cooling down house prices. Any reduction in the tax will be followed by an increase in prices.

It would amount to an attempt to buy an election by massaging the market and would be ill advised, dangerous and irresponsible. Which means the government will probably do it!
 
IMO it will be tempting to give FTBs a boost by coming up with some SD scheme possibly rebate etc for FTB owner occupiers.

This would give a nice push to the FTB market in Q1 / Q2 and tee it up nicely for an election.

In any event the budget is pro cyclical at the top of cycle with plenty of public sector hiring and infrastructure spend which will increase the FTBs supply in the short term. Infrastructure spend is good for govt as the cash goes out to the voting country folk. However longer term this will drive wages and squeez the exporting economy who will have to give wages increases to retain staff from going to public sector.
 
Response from Cowen today as pressure from various VIs mount.

It looks like he sees right through the "help the FTB" good intentions.


http://www.breakingnews.ie/ireland/?jp=CWIDQLKFCWCW
 
In my opinion it should be given in some sort of tax relief that is "hidden" from the vested interests, IE they won't know if you are a FTB or not.

A few years ago we had the FTB grant of £3000 (old money) but all you saw was builders advertising the prices as being £100000 nett of grant, so its just added to the price.

You should have to apply for the stamp duty relief as a tax credit, this means that people involved in tax evasion also miss out.
 
To be honest, I think he could do either of two things (or both)....

1) reduce/remove stamp duty on second-hand homes for FTB's, which would mean that developers wouldn't get to pocket the difference, residential sellers may though.

2) Significantly increase interest relief - putting money back into the FTB's pocket.

Caveat emptor though - I don't believe either of these will "exclusively" help purchasers, but Mr. Cowan is a politician after all - all he needs is for his deeds to have a cloak of respectability.
 

I don't see how interference with SD won't cause upward movement in HP's. It will be leaped upon by all the VI's that everything is AOK with the housing market. If Cowen buckles under this pressure he will lose a great deal of credibility.
 
beattie said:
I don't see how interference with SD won't cause upward movement in HP's. It will be leaped upon by all the VI's that everything is AOK with the housing market. If Cowen buckles under this pressure he will lose a great deal of credibility.
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To yourself, myself, and the majority of AAM members who are financially literate, perhaps.

But if he can say that all he tried to do was help out the poor FTB and that he specifically avoided putting money in the developers pockets, he'll get away with it.

And he only has to get away with it for another 6 months or so until the election.....
 

Your right, the average joe will believe that the good old Min of Finance has given them a leg up in the market when in fact they will just have to pay extra back to the bank in the long run.

If FF/PD's were serious about helping the FTB they could skew the market against investors a bit but I doubt if they will contemplate that
 

Of course. But Cowan is a politician, and with an election on the horizon it's all about soundbites and feel-good factor. Help out the poor FTB's, just make sure the developers don't pocket it.... hence aim it at second-hand homes specifically. Joe Buyer and Joe Seller are happy (for a while), Joe Developer can only look on from the sidelines.

Indeed, with all the buildup in inventory over the last 6 months, the inflationary effect of anything Cowan does now could take until election-time to unravel the current impasse in the market. Does it really matter to FF what happens after the election? Will further rises in interest rates let them off the hook by cancelling out the inflationary effect of whatever they do in this budget?
 
conor_mc said:
Of course. But Cowan is a politician, and with an election on the horizon it's all about soundbites and feel-good factor.
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I dont think FF have anything to fear from the elections. There is no viable alternative. Besides whilst its fashionable to berate any government which is in power i think ahern is doing a good job.
 

I actually like Cowen myself,seems to be a man of principal and doesn't want to interfere in the the market.Bertie on the other hand could pull any stroke and over rule him.As cowen has been saying all along there will be no changes in stampduty,if there is it will look very bad for him as a future taoiseach,he will have no credibility whatsoever in the future for me .
 
phoenix_n said:
The market at the moment is correcting itself so there is no need for any intervention.

And agree on Cowen. I am a fan of Ahern but I think Cowen is going to be a very good future leader of this country.
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I think Ahern is overrated but agree Cowen could be a very good leader.
 
StoppedClock said:
I think Ahern is overrated but agree Cowen could be a very good leader.
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I don't see how Ahern can have any credibilty left after he told anyone not on the property train to get aboard. I don't think I ever heard a leader of a country make a statement of such financial enormity (except for ones of banana republics). Cowen's moment of truth is approaching with the SD decision.
 
I don't get the debate. The government took in more taxes than required - mainly from people who purchased property. Now they want too give it back. Fair enough. Why do it by giving a rebate/discount to the people who are looking to purchase a home now? What use is that to people who already purchased?

Cut income taxes and everybody wins. Simple.
 
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