The Micheál Martin proposal has been shown to be illegal under EU rules, prompting Fine Gael to call for clarity.
Dublin South West TD, Colm Brophy, asked the Finance Minister if rules apply selectively under European Union VAT to a reduction on the rate of VAT to specific categories of house purchases, namely those bought by first-time buyers.
Minister Paschal Donohoe said: "I am advised by the Revenue Commissioners that the VAT rating of goods and services is subject to EU VAT law, with which Irish VAT law must comply. Under the Directive it is not permissible to differentiate the supply of new residential property for different buyers, such as first-time buyers, for the purpose of applying VAT rates."
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Deputy Brophy commented: "Reckless Fianna Fáil have not yet answered how this proposal, which a simple query could have shown was not possible, ended up being touted by the party leader in a newspaper interview.
"Was this a deliberate attempt to mislead people on what they can expect from a FF government? Or was this just a case of FF demonstrating once again that they have no workable policies and no plans for the biggest challenges facing the country?
"Is it credible that after more than a decade in Government Buildings Micheál Martin does not understand EU VAT rules?
"It is reckless and ridiculous to throw out half-baked ideas in the hope of convincing people that FF is a serious party with policy ideas to offer – clearly the opposite is true.
"Since 2016 just five of Fianna Fáil's 22 frontbench spokespeople have offered up policy proposals, opting instead for poorly prepared private member's legislation, or simply throwing out an ill-thought out idea to the press," he added.
He concluded: "Three days after the evidence that it was not a plausible proposal first emerged, no explanation has been forthcoming from Fianna Fáil as to how this bizarre idea gained traction with Micheál Martin. Are we to assume that as well as having no plan, no team and no solutions, Fianna Fáil also have no answers?"
(CM/JG)
