Brian Cowen Suggests Property Tax Hikes Unlikely

by Jason Gorringe, Tax-News.com, London

19 October 2004

In his first interview as Ireland's Finance Minister, Brian Cowen has rejected the possibility of imposing significant new taxes on the Republic's thriving property and building sectors in his forthcoming budget.

Speaking to the Irish Independent following the Chambers of Commerce of Ireland's (CCI) request for the imposition of a site-value tax on all property except primary residences, Mr Cowen argued that property is already highly taxed.

"There is the €1bn yield from stamp duties; capital gains taxes, much of which are levies on property, are worth €1.4bn and add to that commercial rates of €835m. That amounted to a full €3.2bn from the property sector in 2003 which was 10 per cent of the total tax take," he told the Independent, continuing:

"As far as property developers are concerned, they too are subject to special taxes and levies. The property market is a complex one and we would have to consider the effect on the market. You'll remember the Rainbow Government introduced a residential property tax that failed under two headings; it proved unworkable and then the tax return it offered was so small."

Predicting strong continued growth, but stressing that a return to double digits in this area is unlikely, the Finance Minister revealed that he plans to boost wealth creation by driving productivity growth.

"The debate that I'd like to have about the economy is to strongly challenge that facile assumption that those who want to tax more and spend more are themselves more committed to public services than we are. My priority will be to look after those on low incomes; making sure that the lower paid are out of the tax net and instilling a sense of fairness and equity. That is where any tax effort will go," he was quoted by the national newspaper as observing.

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