Ireland Shelves Property Tax

by Jason Gorringe, Tax-News.com, London

13 July 2010

Finance Minister Brian Lenihan is said to have abandoned plans to introduce a tax on property in Ireland’s December budget.

Championed in the Commission on Taxation’s report on closing the deficit, proposals to introduce a progressive tax regime on real estate have been the subject of infighting within Ireland’s leading political party Fianna Fáil.

Fianna Fail politician, the TD for Dublin South East, Chris Andrews called for a conclusion to the matter in tabling a motion, signed by several other party politicians, objecting to the introduction of such a tax. The document reads: “Given the collapse in property values nationally and the serious difficulties that many people are experiencing in meeting repayments, the government must give a commitment that no tax on family homes be introduced in December’s budget.”

Following an interparty meeting on July 6, Andrews told the Irish Times that proposals for a property tax had been abandoned. “Effectively, it’s just not happening. I don’t think it’s going to be a runner this year. If the government lasts until 2012, it will not be introduced in a budget only a couple of months before a general election,” the paper quoted Andrews as saying.

The tax was expected to have been introduced at annual rates ranging from EUR250 to EUR3,000, depending on the size and value of the home in question. Such a tax could generate as much as EUR2bn of the EUR3bn identified as necessary by the government for fiscal savings in the December budget.

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