WE have ghost estates, zombie hotels, unrentable retail units and office buildings as deserted as the Marie Celeste.

Meanwhile, the possible cost of the Anglo bailout soars to more than €33bn and the amount of non-performing Nama loans is revealed as 75 per cent.

Madly generous property tax breaks played their part in triggering the property crash and the banking collapse.

A jaw-dropping amount of State-subsidised tax bonanzas were attached to everything from multi-storey carparks, hotels and housing estates -- to holiday camps, private hospitals and holiday homes.

Taoiseach Brian Cowen recently admitted that he made mistakes in this area as Finance Minster and that the State-subsidised tax bonanzas went on for too long. The Regling-Watson and Honohan reports agreed.

At €7bn by 2005, the cost of various tax breaks to the Exchequer was three times bigger than income tax receipts. As much as €3bn of that may have been property related. That's 75 per cent of what needs to be found in Budget 2010.

It's not as if no one shouted stop -- plenty of people did. But the relentless lobby machine of the construction industry and other vested interests was stronger.

By 2004, even investors thought the property tax gravy train had to brake. Economic consultants Indecon told the State they had run beyond their course and should be phased out, as did a later Goodbody report.

But pressure from builders' lobby group CIF and other vested interests saw then Finance Minister Charlie McCreevy roll over many property tax sweeteners for two more years.

A rush of planning permissions were lodged in 2004 and 2005 as people raced to stockpile on tax reliefs in the expectation that many would be axed. In 2004 alone, 350 applications for hotel projects were made.

Finally, in 2006, then Finance Minister Brian Cowen put the kibosh on many -- but extended the qualifying deadline on others to 2008.

He actually brought in a new property tax incentive as late as 2007. The Mid-Shannon Corridor Tourism Infrastructure Investment Scheme, which takes in his own constituency area in Offaly.

Ill-fated schemes are now getting nobbled by the recession and may get Nama-ed. Not stopping them sooner also meant banks continued throwing money at doomed projects for a few years longer, racking up more Nama-destined property debt.

Below are some of the most legendary tax reliefs that fuelled the boom.

Investment houses and offices

This was the jewel in the crown of crazy Celtic Tiger property speculation. The lure of Section 23 convinced many they were property investment magnates, from high-roller Galway-tent tycoon types to shopkeepers and solicitors.

It allowed tax-free rental income over a long number of years for buyers, and relief even on furbishing costs, in areas that needed "rejuvenating", from inner-city Dublin to rural outposts.

It stoked up the building of sprawling housing estates to an almost unhinged rate near the peak of the boom.

Tiny, overpriced apartments in Dublin and other cities were an early feature. Then investment apartments sprang up everywhere else, from Castlerea to Carraroe.

Incredibly, tax-free rental income applied not only on the new property, but on any other property you owned when you bought a qualifying Section 23 property.

The tax breaks also applied to commercial and other property, and a similar scheme, Section 50, rewarded student accommodation investments.

Suddenly everyone from teachers and civil servants (and God help us, even journalists) were talking about their "property portfolios".

Maverick investors signed up with maverick banks which peddled 90-100 per cent investor mortgages and interest-only packages.

For those who invested after 2005 or so, the financial burden of the mortgage would not be met by rental income. Plummeting rents mean that's even more painfully the case now. Mortgage defaults on these properties could explode when the ECB eventually raises interest rates.

Hotels

Some €329m worth of tax breaks were given for hotels between 2004 and 2007. Uber-generous incentives allowed investors to offset the full cost of their investment against tax over seven years.

No wonder they mushroomed up all over the place.

But while tourism rose by 70 per cent since 1996, hotel bedrooms rose by more than double that, at 150 per cent.

Now the Nama project has become a hotel manager on top of everything else, as hotel investments have gone zombie in droves.

Investors get hit for a massive tax clawback if these premises close down before a seven-year lifespan. As many are cannibalising each other's business it seems inevitable that some will have to be shuttered. Even the industry body, the Irish Hotels Federation, is calling for it.

Several of the 10 top Nama developer names have hotel investments, including Bernard McNamara, and Johnny Ronan and Richard Barrett of Treasury Holdings.

Holiday Homes

Estimated to have cost the State €380m in total, Fine Gael leader Enda Kenny introduced the first holiday home tax-break scheme when he was Tourism Minister in 1995. More would follow.

Aimed at driving development in down-at-heel coastal towns and villages, schemes like Section 48 allowed investors in holiday homes to offset the cost of the property against all their income, on condition that they made them available for tourists to rent for 10 years.

It was a backbench TD/local builder's wet dream. Tic-tac houses and apartments sprang up in places like Carrick-on-Shannon, Enniscrone and Lahinch. The numbers built actually doubled the size of some small towns and villages.

But even with the surge in staycations, many of these holiday homes remain empty this summer.

Historical importance

Owners of hotels and bars in profit gold mines like Dublin's city centre were able to claim tax breaks if their properties were deemed of "scientific, historic, architectural or aesthetic interest". Money spent on the repair, maintenance or restoration of the buildings could be written off against tax.

The owners of well-known pubs like Doheny & Nesbitts and the Odeon have benefitted, and Ronan and Barrett claimed for Treasury Holdings's Malting Tower on Grand Canal Quay and the Westin Hotel on College Green.

Private hospitals

Some big business names borrowed and invested millions into these lavishly tax-incentivised developments.

Tax breaks introduced in 2001 and 2002 allowed owners of private medical facilities to claw back 40 per cent of what they invested in construction. The Goodbody review said it had cost €26m in foregone tax by 2006.

Legislation introduced by then Finance Minister Charlie McCreevy made the reliefs possible. Health Minister Mary Harney's co-location mission added appeal for investors.

Paddy Shovlin's Landmark Developments built the €200m Beacon Clinic in Sandyford in Dublin, and he set up Beacon Medical Group (BMG).

Ballymore boss Sean Mulryan joined fellow developer John Flynn and beef baron Larry Goodman in backing the Hermitage, a €110m 126-bed private hospital in west Dublin.

Finance Minister Brian Lenihan axed capital allowances for private hospitals in the 2009 Emergency Budget, but not for projects already in development, which are covered up to 2013.

Several big private hospital names are making losses. A 10-year clawback feature means investors have to hold their stake for 10-15 years or repay the tax saved.

Urban/rural renewal

Goodbody puts at €2bn these breaks aimed at tackling decline in small towns and villages before they were stopped in 2006 by Brian Cowen.

The rural scheme, Goodbody said, "has not represented value for money". It had led to an over-supply of housing, it added. It was introduced by McCreevy in 1999, covering counties such as Leitrim, Roscommon and Longford.

Goodbody said the urban scheme had been "extremely valuable" but it also caused property price inflation.

Originally published in