Ireland's NESC Calls For Tax On Second Homes

by Jason Gorringe, Tax-News.com, London

02 June 2005

The Irish government's National Economic and Social Council (NESC) has recommended imposing a tax on the purchase of second homes in Ireland in an attempt to cool the property market.

In a study on Ireland's housing needs presented by the NESC to a Cork conference last month, it was recommended that the government implement measures to restrict the sale of second homes to investors, in order to make it easier for first time buyers to reach the first rung of the home-ownership ladder.

The NESC also called on the government to commit at least EUR1.4 billion to social housing over the next ten years, up from EUR600 million.

Property prices in Ireland have soared in recent years, pricing many first-time buyers out of the market. According to the April Permanent TSB House Price Index, however, over the 12 months to the end of April, house prices nationwide rose by 6.5%, down from 7.5% in March and barely half the rate recorded in April last year.

A survey conducted at the Ulster Bank CBRE Gunne Property Conference 2005 has revealed that most developers and investors expect the trend to continue, with 90% expecting prices to continue climbing for at least another year, and 63% believing that they will rise for more than three years.

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