Monday 5 December 2016

Noonan's measure has led to hoarding of land

Published 16/10/2016 | 02:30

'The issue was raised by tax lawyer William Fogarty of Maples & Calder at the recent Real Estate Stakeholders Summit, of which the Sunday Independent and Irish Independent are media sponsors.' Photo: PA
'The issue was raised by tax lawyer William Fogarty of Maples & Calder at the recent Real Estate Stakeholders Summit, of which the Sunday Independent and Irish Independent are media sponsors.' Photo: PA

Measures introduced four years ago to encourage property transactions in the depths of the recession has led to land being hoarded.

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In what appears to be an unintended consequence of the seven-year Capital Gains Tax (CGT) holiday introduced by Michael Noonan in Budget 2012, buyers of land must wait until January 1, 2019 before releasing it to the market to avoid incurring a CGT liability.

The issue was raised by tax lawyer William Fogarty of Maples & Calder at the recent Real Estate Stakeholders Summit, of which the Sunday Independent and Irish Independent are media sponsors.

Highlighting the measure's contribution to the current housing crisis, Fogarty said: "It was brought in to incentivise the market. We're now in the bizarre place where people have bought land - and instead of them putting it to good use, they're waiting until January 1, 2019, before they'll release the land on the market.

"The Government could take a very good look at what impact its tax system is having on the property market. There are people hoarding land because that's what the Government told them to do."   

Read more: People are hoarding land - because that's what they were told to do by Budget 2012

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