Minister for Finance, Brian Lenihan TD gives an initial indicator of his thoughts on stamp duty.

This morning, on RTE’s Morning Ireland programme, the new Minister for Finance, Mr Brian Lenihan TD gave an insight into opinions on Stamp Duty.

When it was put to Lenihan that his predecessor, Taoiseach Brian Cowen was widely criticised for ‘dithering’ on stamp duty, Lenihan responded by saying “let’s be clear about this question. My predecessor didn’t ‘dither’ on stamp duty, he reformed stamp duty in the last budget and put in place an arrangement which in my view is entirely adequate in relation to stamp duty. There was a problem with stamp duty - there was no progressive element in the stamp duty structure.

When the interview suggested to Lenihan that the market ceased to function for about six months due to his inactivity on stamp duty, he received an interesting response.

“No, let’s be clear about this. Every country in the world has a property tax and Ireland is no different from every other country in the world. We do it through a transactions tax called stamp duty but the idea that you can abolish all property taxes to stimulate this particular sector is misguided and I think we’re going to have to face up to that. As you know, most of our partners in the European Union have very substantial property taxes on private residential property. We don’t. We have a transactions tax called stamp duty. What my predecessor, An Taoiseach, did was he reformed that system in the last budget and made it quite clear that it’s not a disincentive for the sale of property and that’s the current position. I’m certainly not going to raise expectations in that department or respond to some kind of stimulated clamor about it.

Asked to comment on the OECD’s recent suggestion that that it might be a good idea to introduce some kind of property tax, Lenihan said: “There are no proposals in government to introduce a property tax. Effectively in Ireland, stamp duty is the property tax and if there’s an overwhelming popular demand to replace stamp duty with a property tax, I’ll certainly examine it. At this stage, it’s the current property tax we have, the outgoing finance minister reformed it in his last budget and I don’t believe it’s central to the current difficulties in the housing market.”