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'Mum's the word' strategy on stamp duty has to change before the election
Kevin Rafter Political Editor



IT'S NOT often that Bertie Ahern has to play second fiddle, but that was the role assigned to the Taoiseach last Monday morning as Fianna Fail published its economic framework document for the general election.

Brian Cowen led the line, confidently fielding questions on his party's costed tax and expenditure plans. However, when asked about stamp-duty reform, the finance minister clammed up."We will do nothing that will disrupt the market. I have made my position very clear on this, " Cowen stated.

He described as "ill-thought-out" Fine Gael's plan for a three-year reform package that would eliminate stampduty bills for most first-time buyers and reduce the tax for most other purchasers. But when asked what Fianna Fail was proposing, Cowen adopted an unusual position for a politician in election mode. "I am not speculating on the matter, full stop, at this time, " he said.

Fine Gael and Labour set out their stall on Thursday with Enda Kenny's awkward announcement of a u-turn in his party's stamp-duty proposals.

The much-criticised three-year timeframe was gone, replaced by a commitment to make the changes in a single move.

But bizarrely, the parties would not disclose their timeframe. The matter would be a "priority" was the line as the two opposition parties adopted the pose of government.

Richard Bruton battled throughout the day, fielding hostile questions from Sean O'Rourke on RTE's News at One and later from Matt Cooper on Today FM.

A difficult day concluded on Prime Time with even Fianna Fail backbencher Sean Fleming scoring a few points against the Fine Gael heavyweight.

The cost of the Fine Gael-Labour package would be in the region of 500m. There is no denying that stamp duty has become a problem with the current government's failure to adjust payment bands to take account of the buoyant properly market of the last decade.

But the evidence indicates that the tax is less of an issue for first-time buyers and more a problem for those trading up to a larger home, especially in the Dublin region.

There are about 50,000 property transactions every year that involve a stamp-duty payment. First-time buyers are generally only hit with a stampduty bill when they purchase a second-hand house.

However, adjustments to the stampduty regime in recent budgets mean that all first-time buyers paying up to 317,500 are exempt from the tax.

In the Dublin region, 50% of all firsttime buyers of second-hand houses and apartments do not pay stamp duty.

The figure is higher outside Dublin given lower property values beyond the capital.

Between January and October 2006 there were 44,500 property transactions that involved a stamp-duty payment. Of these, 3,700 related to houses and apartments valued above 635,000, which attracted the top 9% stampduty rate.

Yet, despite these relatively small numbers, stamp duty preoccupied the politicians all week long.

The Progressive Democrats returned to the debate on Friday. If back in government, Tanaiste Michael McDowell said, the PDs would press for reform before the new Dail breaks for its summer recess.

He said he had had "private conversations" with Brian Cowen about the issue and hinted that Fianna Fail would come round on the issue.

In responding to McDowell, Bertie Ahern seemed to suggest his party would not remain outside the property market auction.

"If we do something, to do it before the summer would make sense, " Ahern said.

Keeping mum on its plans for the property market is an unsustainable election strategy for Fianna Fail. The party's spending plans to 2012 contain a 1.25bn fund described as being for contingencies and other measures that have not yet been announced.

Cowen and Ahern have said repeatedly that their focus in recent years has been on first-time buyers. It is, therefore, natural to assume that whatever Fianna Fail is planning will target this key group.




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