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25/01/2010
Developers' Tax Break 'Costly'
Figures just published have revealed that a special lower rate of tax made available to property developers has cost the Dublin Exchequer €800m.
The tax rate was introduced to free up land for development in 2000 - and was scrapped in January 2009.
It worked on account of land being sold for development purposes which was then liable for income tax, but not for capital gains tax.
Figures from the Revenue Commissioners now show the tax was used in 10,000 cases between 2000 and 2007.
Accountancy experts estimate the cost to the Exchequer was €800m over that period.
This 'Special Incentive Tax Rate' was introduced to encourage the release of land for residential development.
The special incentive rate was 20%, as opposed to the higher rate of tax of 42% which was later reduced to 41%.
The incentive meant that money from the sale of land was not liable to the health levy or PRSI.
The amount of revenue forgone by the Exchequer is significant considering urban and rural renewal tax incentives, which attracted considerable criticism, cost the taxman €2bn.
(BMcC/GK)
The tax rate was introduced to free up land for development in 2000 - and was scrapped in January 2009.
It worked on account of land being sold for development purposes which was then liable for income tax, but not for capital gains tax.
Figures from the Revenue Commissioners now show the tax was used in 10,000 cases between 2000 and 2007.
Accountancy experts estimate the cost to the Exchequer was €800m over that period.
This 'Special Incentive Tax Rate' was introduced to encourage the release of land for residential development.
The special incentive rate was 20%, as opposed to the higher rate of tax of 42% which was later reduced to 41%.
The incentive meant that money from the sale of land was not liable to the health levy or PRSI.
The amount of revenue forgone by the Exchequer is significant considering urban and rural renewal tax incentives, which attracted considerable criticism, cost the taxman €2bn.
(BMcC/GK)
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