PD meeting: The Progressive Democrats have promised a major reform of stamp duty and claimed that the Government does not need the current "massive" levels of revenue it is collecting from the tax at present.
Following the parliamentary party's special "think-in" in Malahide yesterday, Minister for Justice Michael McDowell said the reform of stamp duty would be a key policy for the party as part of its re-election campaign next year.
He described stamp duty as "something which is at the moment seen to be arbitrary and unfair".
He said: "I have to ask myself, and so do all of my colleagues, whether it's fair to say to a couple who have lived in a small apartment and who now want to move to a place with enough room to bring up their family, that they have to pay crippling amounts on stamp duty, when the State itself does not need that money."
Mr McDowell used yesterday's press conference to highlight taxation as an issue his party would be focusing on in advance of the general election.
"Taxation is a central issue, and we reject entirely the notion that taxation is something which can be regarded as a non-issue because there is some sort of pseudo-consensus on it."
The party also produced a paper on taxation, highlighting that property stamp duty yields stood at €2 billion last year, and predicted that overall stamp duty revenue would top €3 billion this year.
He admitted that the party had not yet decided its approach on stamp duty reform, but that it was examining a number of options.
The party is awaiting the outcome of a study by the Department of Finance on the breakdown of stamp duty payments across sectors and buyer types, before a decision is finalised.
Options include the abolition of stamp duty for people changing their principal private residence, and a deferral system for purchasers.
Other options being examined by the party involve changing the current threshold system where buyers pay a certain rate on the whole price of the house.
This could be changed to a banded system similar to the current income tax band system, where people would pay zero or low rates on the first few hundred thousand euro of the value of a house.
Mr McDowell said this change would mean that somebody buying a €700,000 home would see their stamp duty bill drop from €63,000 to €37,000.
"We want now to quantify each step of what we propose, and determine its likely effect on the property market," Mr McDowell said of the plans.
"We now have to go very, very carefully to see how it would in fact impact on property prices and whether it would be of huge benefit to people who are struggling to pay these very significant sums which the Government really does not need."
Mr McDowell also defended the fact that the Government had to date failed to meet two key taxation promises in the Programme for Government - reducing the high rate of tax from 42 per cent to 40 per cent and ensuring that only 20 per cent of the workforce was paying the higher rate of tax.
He said the Government's record on income tax, such as removing people on the minimum wage from the tax net, was "prodigiously better" than other administrations, but he declined to give any commitment on reaching the two outstanding promises.
"The Government parties will, and I'm not going to pre-empt the budgetary process, do their level best to meet the commitments made in the Programme for Government as to our tax strategy," he said.
Mr McDowell also attempted to portray opposition parties as being in favour of an increased tax burden.
"The instincts of most of the Rainbow parties, particularly the left-wing supporters of them , is to increase taxation," he said.