Dáil Éireann Debate, Thursday - 6 October 2016
91. Deputy Joe Carey asked the Minister for Finance his views on whether a reduction in the rate of capital gains tax applying to gains on the disposal of residential lands may free up sites for development and assist in the delivery of housing units; and if he will make a statement on the matter. [29209/16]
View answerIn theory a reduction in almost any tax could lead to an increase in output in a specific sector. For a reduction in VAT could, theoretically, lead to an increase in sales of particular goods or services. These considerations must be balanced against the potential negative impacts of changing the application of or the rates of tax and the need to fund the activities of the State.
I wish to assure the Deputy that my Department continues to monitor developments in the property market. In terms of increasing housing supply, the Government's recently announced Rebuilding Ireland - Action Plan for Housing outlines its commitment to develop a fully functioning housing market that meets the needs of its citizens. This Plan takes a holistic approach in addressing the many interacting structural constraints affecting the housing market by including actions to streamline the planning system, remove infrastructure blockages and support the delivery of affordable housing. These measures should help make new developments economically viable in areas where supply constraints (and price pressures) are particularly acute.
I am not certain therefore that any change in the rate of capital gains tax on residential lands would improve the ability to provide for a fully functioning housing market.
