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Sinn Féin’s priority is to help first time buyers – Ó Caoláin

27 June, 2007

Speaking on the Finance (No. 2) Bill in the Dáil Sinn Féin Dáil leader Caoimhghín Ó Caoláin has said Sinn Féin cannot support the legislation as the changes will most likely end up increasing prices and making houses even more unaffordable. Deputy Ó Caolain said Sinn Féin's commitment is to help first-time buyers to secure affordable housing.

He said, "Sinn Féin is committed to helping first-time buyers to secure affordable housing. We are especially concerned for those young couples on average incomes who are over-borrowing for overpriced houses and are being forced to place themselves in extremely vulnerable positions, given that further increases in interest rates are already signalled.

"Therefore the key question for us in determining if we can support the proposals contained in this Bill is whether they will make housing more affordable. Sadly, these changes will most likely end up increasing prices and making houses even more unaffordable. This has been the impact of previous changes. This reality is the main reason the Department of Finance advisers have been so reluctant to support proposals to reduce or remove stamp duty.

"A 2005 paper by advisers to the Government's tax strategy group concluded that there would be no guarantee that changing stamp duty rates or increasing thresholds would benefit principal home buyers because 'there will be, most likely, some consequent increase in house prices'.

"Sinn Féin, therefore, cannot support this legislation. Sinn Féin recognises there are flaws in the current system of stamp duty and we are therefore open to reform. However, we cannot support changes that will have the effect of making houses even more unaffordable for first-time buyers while giving most benefit to those wealthy enough to be purchasing their first house at the top end of the market. If stamp duties for first time and principal home buyers can be reduced to assist those on average incomes without pushing up house prices and making them more unaffordable, then we would propose taking such steps. For example, if reforms involved changes to the stamp duty thresholds or changes whereby stamp duty would only apply to value in excess of the threshold and were accompanied by price controls in the housing sector, this might have the desired result.

"Our bottom line is that we will support whatever policy instrument will be most effective in ensuring that people, especially those on low and average incomes, can access the house of their needs.

"Sinn Féin has proposed ring-fencing a proportion of stamp duty receipts for further investment in social housing provision. Given that Sinn Féin genuinely wants to help would-be first-time and principal home buyers, we have proposed, in place of these stamp duty changes, a number of measures to reduce investor-led demand and, therefore, house price inflation. Sadly, looking at the statistics, it is indicated by the Irish Banking Federation that only about 2,000 of the 38,000 first-time buyers in 2006 had to pay stamp duty. Clearly, therefore, the Government's measures will only benefit a very tiny and, most likely, well-to-do section of the population." ENDS

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