Economy:Housing stamp duty changes proposed by Fine Gael would discourage purchases and hit valuations of homes, Minister for Finance Brian Cowen warned.
"Why would anyone buy a house when you are being promised a stamp duty regime which gets better the longer you don't buy a house," he told the Fianna Fáil Ardfheis.
Fine Gael has proposed a three-year plan to eliminate stamp duty for first-time buyers purchasing homes worth less than €450,000, and reduce charges facing all other buyers.
Such an idea indicates no understanding of how the property market really works and what the consequences for the market would be Mr Cowen argued.
Intending purchasers might think they are paying less stamp duty in the short-term, but he doubted if their home's value would hold if an ensuing crisis of confidence hurt the property market.
Fine Gael, he said, is also "threatening the equity that has been built up in more than 1.5 million households over the past number of years", he warned.
Such changes, he added, would damage the housing market, affect those trying to rent houses and endanger the jobs of many of the 260,000 construction workers.
"As Minister for Finance, I feel duty-bound to point out that any changes that are made in stable market conditions must be carefully thought through," he said.
Housing demand is currently levelling with supply, while prices are stabilising, he argued. "This is clear evidence that our policy is working and that a soft landing is in prospect," he said.
He further added that he had made changes to stamp duty rules in two of his three budgets aimed at helping buyers trying to get a foot on the property ladder.
"First-time buyers are hugely important if we are to have a buoyant construction sector because new entrants are critical to an orderly and sustainable market," he said.
"That is why our consistent approach in the highly-sensitive market has been to focus assistance [on them]."
He added that first-time buyers do not have to pay stamp duty on "the vast majority" of new homes.
Extra mortgage reliefs targeted at first-time buyers, worth €1,600 for couples and €800 for singles had "enhanced and not undermined" the property market.
"These are the criteria which must apply to any initiative if it is to help and not hinder the market," he said, warning that Fine Gael's proposals would have "dramatically adverse effects".
"My initiatives were carefully calibrated . . . all possible impacts were thought through beforehand".
Just 3,700 of the 44,000 houses bought in the first 10 months of last year attracted the highest rate of 9 per cent stamp duty, Mr Cowen told delegates.
Questioned about the Progressive Democrats' stamp duty promises, which are similar to Fine Gael's, Mr Cowen said post-election decisions depend on the mandates parties achieve.
"We are making it very clear from Fianna Fáil's point of view that we don't intend doing anything which will destabilise the situation," he said.
Parties proposing changes to ease problems faced by 50,000 house purchasers must not do anything to adversely affect "the equity painstakingly built up over the years" by existing homeowners.
Responding to Labour's pledge to cut the standard tax rate by 2 per cent, Mr Cowen said: "When people consider who is most likely to cut tax rates . . . the score is Fianna Fáil/Progressive Democrats 31, The Rainbow [alternative] one."
