The Hurler On The Ditch

Stamp Duty

The headline article in The Sunday Independent was an interesting analysis of the amount of stamp duty collected by the Government. However Jim Power chief economist of Friends First says

...if the rates were cut, there could be a six-month property price increase, but in the long run it would increase the supply of homes

I can't see how there would be an increase in the supply of homes.

The abolition of stamp duty would increase the amount of money that individuals have to spend but not the supply of houses. While it appears that purchasers are paying this tax it is really the vendors, as purchasers have less cash available for the purchase. This is particularly evident at the first time buyer end of the market where loans are frequently taken for the maximum amount available.

posted by Hurler @ 6:24 pm