The economic mess that Ireland has got itself into is, as is well-known, a consequence of the credit-fuelled property boom. It was further boosted by infrastructure development funded by the EU, which would have been beneficial if only there had there been an effective land value capture mechanism is place. Instead, the Irish government abolished residential property taxes, thereby pumping up the boom still further.
The Irish government is belatedly re-introducing a property tax. Instead, however, of targeting irresponsible developers, speculators and banks, the government is planning to bail them out again by excluding their land hoards and undeveloped sites from the new property tax. So that they can continue to pay nothing, ordinary home owners will have to pay at least 20% extra tax every year.
"The Fair Tax" by Emer O'Siochru, discusses the subject and proposes a way forward. The author is an architect and a development and planning valuation surveyor, and her book will be published by Shepheard-Walwyn on 12 September. The Preface, by, Colm McCarthy, points out that the tax regime has been very favourable to property owners, but especially to developers who, together with their banks, took maximum advantage. It fuelled the disastrous property boom with the huge development-site debts racked up by a handful of avaricious developers, and led directly to the Irish state having to shore up the collapsing banks.
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