Michael McDowell

The Progressive Democrats Party said this morning that it will seek to abolish stamp duty for first time buyers by the summer if they are part of the next government. The party has been in Government with Fianna Fáil since 1997.

VAT at a rate of 13.5% will still apply to new residential properties. There is no VAT on new housing units in the UK.

Launching the party's economic policy document this morning, Tánaiste Michael McDowell, said that, "subject to maintaining budgetary prudence", the PDs would commit to abolishing stamp duty for first time buyers before the Dáil summer recess.

The stamp duty pledge comes a day after Fine Gael and Labour promised to abolish the tax but crucially gave no time frame for the move. 

McDowell also announced plans to reduce the both rates of income tax by two percentage points to 38 per cent and 18 per cent, respectively, "in the lifetime of the next government".

Speaking at the Dublin City Chamber of Commerce this morning, McDowell said that it was essential to abolish stamp duty immediately to avoid destablising the market.

 "Large Stamp Duty bills are impacting upon workers who need the freedom to  move between regions, as well as older people who want to move to smaller second-hand homes when their children leave the family home.

"To ensure maximum market stability, we will implement our reform with  immediate effect," he said. "There will be no 'phasing in' period. We will do this  through legislation enacted before the new Dáil rises for the 2007 summer  recess."

The PDs say that the change will mean the average national house price will reduce by €8,250, while the reduction in Dublin would be €17,050. 

Other plans announced today,  include increasing the children under-6 payment from €1,000 to at least €2,000 per annum, a €12 billion budget for childcare services and 50,000 new childcare places by 2010.

Child benefits will also rise in accordance with any rise in the cost of living, according to McDowell.

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