26/6/2013: SVT was the only form of property tax promised to the Troika

The previous Government of the FF/GP did not shower itself in a glory of competence. However, someone recently sent me a document from the Department of Finance which clearly shows that when it came to structuring the tax changes under the Troika programme, the FF/GP Government did understand the arguments in favour of the Site Value Tax (as opposed to the Property Tax) that were presented to them by, among others, myself.

http://www.finance.gov.ie/documents/publications/other/2012/eulettertrichet.pdf page 2 contains a reference solely to the Site Value Tax and no reference to the property tax.

This implies that the Troika had no objection to the SVT being the only tax on real estate in Ireland, and that the currently instituted system of property taxation (that exempts large land ownership from tax and induces a system of charges wholly unrelated to economic, environmental and social costs of property) was installed based on the current Government decision absent any pressure or compulsion from the Troika.

You can read on the benefits of SVT over the traditional property tax here: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2029515

6/12/2012: Why was development land left out of Property Tax net?

The Government published the long-delayed and super-secret until now Thornhill Group report into the structuring of the property tax. One point that the report raises is:

"The Group notes the recommendation of the 2009 Commission on Taxation for a recurrent tax on zoned development land and suggests consideration be given to the proposal with a view to supporting proper long term planning and sustainable development. "

Now, the Government has opted for a property tax based on 'market value' assessment. However:

1. Land is property
2. Land has market value that can be assessed

Why is development land, zoned land, any other land not covered by the Property Tax?

Budget 2013 measures clearly subsidize financially-instrumented property speculators over those who invest in more efficient use of their homes. With exemption of development land from the tax net, the Budget also subsidizes land banking and land speculation. Once again, at the expense of ordinary homeowners.