The Government is bringing in a new mansion tax through a third rate of stamp duty, worth 6pc which will be introduced for properties worth over €1.5m.
Existing stamp duty of 1pc will continue to apply for properties worth up to and including €1m, 2pc on properties worth over €1m but less than €1.5m.
The new 6pc rate is kicking in from Tuesday night.
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This year, the measure is predicted to bring in €20m while next year, this will rise to €80.
“We’ve got to have a progressive nature to how we have stamp duty in our country, properties below €1m at 2pc, above €1m at 2pc. There’s recommendations from [the] Commission on Taxation that individual properties valued in excess of €1.5m should pay an additional amount of stamp duty,” Minister Chambers told the Irish Independent.
“It’s important, when you are developing a tax package, that you can balance some of the taxation measures with Revenue raising measures and I think this was a progressive and fair measure to pay for some of the other areas of policy that we want to advance through the Budget.”
He rejected the assertion that the higher tax rate has been brought in by Government in an attempt to bring down house prices.
“I think for the majority of Irish people, they’re looking for homes at a much more affordable rate than where that stamp duty is near.
“I think people that can afford a home at €1.5m can contribute more to our stamp duty system and that’s why having a tiered approach that’s progressive, I think should be how we develop the framework around stamp duty and why it was an appropriate revenue raising measure,” he said.
Meanwhile, Public Expenditure Minister Paschal Donohoe said it is up to families if they want to have more children following the Budget today which includes a quadruple Child Benefit payment, a “baby boost” of €420 for parents with newborns, higher weekly hikes for maternity, paternity and parents benefits as well as cuts to cost of school and college.
“That is a matter for families and for partners,” he said.
“Our population is growing quickly. Our population has gone up to 400,000 to 500,000 people in the last number of years. It’s always a matter for families regarding what family and personal choices they want to make.
“What I think is the business of Government is recognising that having a family at the moment is expensive.”
Enterprise Minister Peter Burke was on Monday night lobbying the Coalition leaders and money ministers for a 9pc VAT rate in hospitality, however, Minister Chambers rejected his proposal.
Minister Burke made a last-ditch effort to cut the rate by bringing in an 11pc rate, but this too was rejected.
“When we agreed the summer economic statement and the tax package of €1.4bn, there was a clear understanding that a predominant focus on that would have been around income tax,” said the Finance Minister.
“We didn’t have the tax package to advance a tax reduction.”
