Dáil Éireann Debate, Wednesday - 1 June 2005
27 Mr. Gogarty asked the Minister for Finance if his Department has assessed the extent to which property based tax reliefs have fuelled property price inflation; and if he will make a statement on the matter. [18339/05]
View answerThere are a number of property based tax relief schemes which cover a wide spectrum of economic and social activity. These include specific incentives to encourage the rejuvenation and development of targeted areas as is the case of the urban renewal and rural renewal schemes or to encourage activity in certain sectors, such as child care provision and student accommodation, where a rapid increase in demand and a lag in supply responses by the private sector resulted in increases in price inflation in respect of the costs of these services. Additionally, in many of the schemes relief is not only available for construction expenditure but is also available for refurbishment and conversion works. Given the wide range and scope of the reliefs and the complex nature of the interaction of other non-tax, sectoral specific and area specific supply and demand factors, the impact of all the incentives on property prices is difficult to isolate given that the schemes affect both the supply and demand side of the equation.
The review of tax expenditures I announced in the budget includes these property based schemes and requires the consultants to examine the impact of the schemes on the overall housing market in particular.
