Calls to abolish stamp duty for first time buyers
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What is the proposed stamp duty cut for first‑time buyers and why is it being considered?
The
Clare Byrne Show on Newstalk
with Aviva Insurance.
We begin this hour with the news that the Taoiseach hasn't ruled out a stamp duty cut for first-time buyers in the budget. Pressure is coming from within Fianna Fáil to make the change, while the Fine Gael leader shut down any speculation that it might happen. Well, I'm joined by Senior Lecturer in Economics at TU Dublin, Emma Howard, and Labour Spokesperson for Housing, Conor Sheehan. Emma, I'll start with you. Is this a good idea? It's Seamus McGrath in Fianna Fáil who says, look, if you can save on average the four grand for a first time buyers, that it cuts them some slack at a really expensive time in their lives.
Yeah, I don't think it's a good idea, Clare, because it's yet again another demand side measure when really what we need is more supply of housing. So if you look at, you know, the ESRI had a report out recently showing that our housing is about 17% overvalued in Ireland, and that is primarily... because prices are rising faster than incomes and it's down to a lack of supply. So when you do things like cut those taxes for first-time buyers, as you say, first of all, you know, it's not going to make a big difference. It's 1% on houses up to a million. So, you know, if you're looking at someone who's buying a house for half a million, it's going to give them another €5,000. It's not going to make or break them in terms of their affordability.
Well,
if you're a first-time buyer, €5,000 is an awful lot of money, isn't it?
Yeah, but again, it's just going to drive up that cost of housing overall again. And it's another universal measure where, you know, that cut will be to people regardless of their affordability, regardless of their income.
Why do experts argue that cutting stamp duty won’t solve Ireland’s housing shortage?
And, you know, what we know from similar schemes. So if you look at, for example, the help to buy scheme that the government have had in place for a number of years now, we know the parliamentary budget offices did a report on that that found that a third of people didn't need it. And what it was really doing was just giving them a bigger deposit. It fuelled property price inflation. And the ESRI said that if we were to scrap that scheme, it would actually bring down house prices for everyone. So again, We're just adding to that house price inflation if we're giving people more money to spend on housing rather than addressing the root problem, which is a lack of supply.
OK, well, as I said, Conor Sheehan is with us, Labour spokesperson for housing, doing the job of Seamus McGrath from Fianna Fáil today. Conor, because you support him on this plan.
Well, Clare, what I'm saying is that it wouldn't be my priority is the first thing I'd say. And if you are going to look at a stamp duty cut, then it can't be a universal stamp duty cut because it doesn't deal with the actual... That's not what he's saying. What
he's saying is it's for first-time buyers, which you support,
don't you? Well, it doesn't actually deal with the supply issues. State only delivered 935 affordable homes last year. That's the root of this issue. And there are a load of reports there in relation to the Help to Buy and the First Home scheme that actually show how inflationary both of those schemes were.
How would a stamp duty exemption impact the upfront costs for first‑time homebuyers?
And the fact of the matter is that €3,000 to €5,000, I mean, everybody at budget time loves throwing these things around. Simon Harris has apparently already rubbished it and he is the Minister for Finance. So I don't see really where Fianna Fáil are going. So you're
ideologically opposed to getting rid of stamp duty for first-time buyers. Is that your position?
Well, I am opposed to getting rid of stamp duty for first-time buyers universally. because I think that there is a huge issue there around the fact that this is not going to, and it will actually disproportionately benefit those who have more money to spend on housing, because stamp duty is a percentage of the sale price of the home. So if the home is worth €800,000, then that's eight grand. So that will disproportionately benefit somebody who is actually wealthier.
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Chapters
8 chapters
1
What is the proposed stamp duty cut for first‑time buyers and why is it being considered?
0:01–1:49
2
Why do experts argue that cutting stamp duty won’t solve Ireland’s housing shortage?
1:49–3:17
3
How would a stamp duty exemption impact the upfront costs for first‑time homebuyers?
3:17–5:01
4
What are the fiscal risks of a stamp duty cut amid Ireland’s broader budget pressures?
5:01–6:58
5
Could removing stamp duty only on new‑build homes better target first‑time buyers?
6:58–8:37
6
How does Ireland’s stamp duty rate compare with other EU countries and the UK?
8:37–10:39
7
Should a stamp duty exemption be limited to properties under a certain price threshold?
10:39–12:19
8
What alternative policies could address housing affordability beyond stamp duty cuts?
12:19–13:40