THE Democratic Party has proposed that first-time flat-buyers should receive tax exemption. For the first five years, half the interest payable on mortgage repayments should be tax-exempted up to a maximum of $100,000. 'This will help those buying homes and have some stabilising effect on the property market without giving excessive stimulation that will cause inflation,' said economic spokesman, Dr Huang Chen-ya, after putting the proposals to Financial Secretary Donald Tsang Yam-kuen. Dr Huang said the plan would help 'revitalise the economy and improve employment opportunities'. The Democrats also urged the Government to increase the personal tax allowance by 15.2 per cent from $79,000 to $91,000 in the next Budget, saying this could 'drop 100,000 people out of the tax net'. Dependent parent and first and second child allowances should be raised to 13.6 per cent, which was calculated by adding the five per cent estimated economic growth rate to the inflation rate of 8.6 per cent. The single parent allowance should be raised by 127.5 per cent, and that for families with mentally handicapped members tripled. The party also suggested a one per cent reduction in corporate profit tax of 16.5 per cent for the first $1 million profit, and 0.5 per cent for subsequent earnings, saying this would help small and medium-sized firms.