BERTIE and his new coalition buddies are hyping the fact that they doing away with stamp duty for first-time buyers.

That's a bit like beating the crap out of someone for ages and then expecting them to be grateful when you finally stop doing it. It also appears that the rest - ie non firsttime buyers - are going to continue getting the lard larruped out of us for some time to come.

The worst-hit are young couples desperate to trade up and get some extra space for a growing family (see panel). They will continue to be walloped by a tax that has grown to monstrous proportions along with the property market.

Stamp duty thresholds haven't even been linked to inflation, let alone the ballooning property market. And so the Government's take has soared - from Euro1.6bn in 2003 to Euro3.6bn last year. In fact the Government has been enjoying far bigger profits from property than the speculators it has often blamed for ramping up house prices!

It gets half as much in stamp duty as it does in corporation tax. (All the Intels, Microsofts, IBMs, Pfizers, Dells and every other company in the country put together contribute Euro7.2bn. ) Promising to do away with stamp duty for all first time buyers was a handy catchcry for the election. But if implemented as indicated, first time buyers would pay no stamp duty at any level - even if rich enough to buy a Euro5m mansion!

Meanwhile, couples desperate to trade-up will be forced to stay put in flats too small to rear families. And the market will continue to be riddled by anomalies caused by stamp duty thresholds.

For example, if you pay Euro381,000 for a home, you pay stamp duty at 6% - a total of Euro22,860. But if the price goes up by one euro, you move into a new bracket and the whole shebang is taxed at 7.5% - a total of Euro28,575. That must be paid in cash and is usually not covered by a mortgage.

A home costing a euro more than Euro635,000 moves onto the next bracket - 9% - and that euro would cost an extra 10 grand in stamp duty.

The result is that buyers fight tooth and nail to avoid moving into a new bracket, which was fine and dandy when the market was roaring ahead.

But when prices are falling it will drive them lower at an even faster rate.

What's needed is a complete overhaul of stamp duty.

It should be drastically reduced and the thresholds should be index-linked for inflation.

The bands should be graduated so that, for example, you pay 6% up to Euro381,000 and then 7.5% only on the portion of the price above that - not the full whack.

The only excuse for not reforming stamp duty was because doing so may have driven prices even higher.

There's no excuse now in a falling market, where the latest figures point to a real problem among traderuppers.

Most political parties promised stamp duty relief for first-time buyers since long before the election.

Bertie Ahern has gone out of his way to point out that it's the first thing he will implement in the new D�il. Yet this has had little impact on the property market.

Demand from first-time buyers remains fairly healthy, but the big slump has been among trader-uppers, who are down 25%, according to figures published this week by the Irish Bankers' Federation.

For some reason they have waning enthusiasm for handing over two years' wages to pay tax for the privilege of buying a hugely overpriced and depreciating asset.

Caught in the stamp duty trap - STAMP DUTY: THE GROWING PAINS

Sean and Carla are a young couple living in a small two-bedroomed apartment. The 700sq ft pad was perfect for a pair of young singletons. But they now have one child - Luke - and another is expected in December.

The apartment is simply not big enough for a growing family and they desperately want to move into a three-bed house with a garden, near Carla's parents in the suburbs. However, they have been constantly thwarted by rising property prices. In fact, the extra money they now have had to raise to "trade up" - about 200 grand - is about how much they paid for their apartment in the first place! Price rises have made the second rung of the property ladder just as hard to clamber up to as the first. Around Euro560,000 is the bare minimum they will have to fork out for a shot at suburban bliss.

But it gets worse. Because they are no longer first time buyers, they have to pay stamp duty at the full whack - 7.5% of the property price. That means handing over Euro42,000 in cash to the Government - as much as they earn after-tax in a whole year.

They simply don't have the stomach for this and prefer to sit tight as property prices fall and uncertainty over stamp duty continues.

THE STAMP DUTY BRACKETS

Aggregate Consideration First Time Buyer Rate Full Rate Less than Euro127,000 Exempt Exempt Euro127,001 - Euro190,500 Exempt 3% Euro190,501 - Euro254,000 Exempt 4% Euro254,001 - Euro317,500 Exempt 5% Euro317,501 - Euro381,000 3% 6% Euro381,001 - Euro635,000 6% 7.50% Over Euro635,000 9% 9%