Windfall tax extended to more property deals
THE windfall tax, which was introduced to the 1997 Tax Consolidation Act as part of the 2009 NAMA legislation, has been extended under the Finance Bill to include material contraventions to development land.
The amendment takes immediate effect. The tax, an initiative championed by the Greens to prevent land speculation on rezoning by developers, allows for the application of an 80pc tax on profits gained from increases in land value due to rezoning decisions.
The extension of the tax to include material contravention -- that is any decision taken by a council that improves the value of the land -- came under criticism from Labour finance spokeswoman Joan Burton.
"Given the state of the property market, this provision is purely notional at present and is unlikely to yield any tax take. By contrast, the thorny issue of the huge tax losses being accumulated by banks and property developers as a result of the property crash, and which they can use to set off against future tax liabilities, is not addressed in the bill."
Individuals buying sites for personal development will be unaffected as provisions are included to ensure the tax will not apply to the sale of one-off sites below an acre or sites with a value of less than €250,000.