Finance Minister Michael Noonan said that while the Government can not restore the construction industry to what it once was, it can create the right conditions for construction employment to return to normal sustainable levels.
He unveiled some measures to restore some confidence and to renew activity in the construction, development and property sectors.
The stamp duty rate for commercial property transfers will be cut from the current top rate of 6% to a flat rate of 2% on all amounts from midnight tonight for all non-residential property, including farmland and commercial and industrial buildings.
The current stamp duty arrangements for residential property will continue to apply with 1% on transactions up to and including €1m and 2% on higher amounts.
The Minister also announced a capital gains tax incentive for property purchased between midnight and the end of 2013. If a property is bought during this period and held for at least seven years, the gain attributable to that seven-year holding period will be relieved from Capital Gains tax.
Increased relief for boom time first-time buyers
Mr Noonan said that the Government is committed to helping address the problems faced by those that bought homes at the height of the property boom between 2004 and 2008. He said he will increase the rate of mortgage relief to 30% for first-time buyers who took out their first mortgage during those years.
He also said that mortgage interest relief will no longer be available to house buyers who buy after the end of 2012 and will be fully abolished by 2018.
For those wishing to buy a home next year, Mr Noonan said that first-time buyers will get mortgage relief at a rate of 25% rather than the 15% proposed by the previous Government and that non-first-time buyers will benefit from relief of 15% instead of the previous proposed rate of 10%.
The Minister said he was also aware of those in mortgage difficulties and said he expects to make a formal announcement on what the Government will do to assist mortgage holders in arrears.
Mr Noonan said that reliefs in Section 23 type investments will not be terminated or otherwise restricted for investors with an annual gross income under €100,000 as they are at the greatest risk of insolvency. But those with incomes over €100,000 will pay a 5% surcharge on the amount of income sheltered by property reliefs in a given year.
No legislation on upward-only rent reviews
The Minister said it had not been possible to develop legislation to tackle the issue of upward-only rent reviews which would not be vulnerable to legal challenge or require compensation for landlords.
He also said that NAMA was today publishing a policy guidance for dealing with tenants' difficulties arising from upward only rent reviews. This policy guidance provides the agency a chance to approve rent reductions where it can be shown that rents are in excess of the current market levels and visibility is threatened.
The NAMA policy also provides for the appointment of an independent valuation of market rent where necessary.
Mr Noonan said that the NAMA board, with his agreement, had asked former HSBC chief executive Michael Geoghegan to review the agency and report his findings to the Finance Minister.
The Minister said that while the report was ''generally positive'' he has decided to establish an advisory group to advise him on NAMA's strategy and its capacity to deliver on that strategy through property disposal and the ongoing management of assets.
In making appointments to the NAMA board, he said the Advisory Group will help him identify candidates with ''entrepreneurial and property skills''.
