Vol. 525 No. 1
110 Mr. Yates asked the Minister for Finance if he has any plans to introduce any form of windfall tax in relation to rezoned land for housing purposes or any other taxation proposals that may restrict the profits of land speculators arising out of the current unprecedented demand for increased housing. [23683/00]
At present, any gains arising from the disposal of land is subject to capital gains tax unless the land is held as part of the trading stock of a trade of land dealing/developing land. The rate of capital gains tax which currently applies is 20%. If land is held as trading stock of a trade of land dealing-development then the profit from its disposal is taxed in the normal way and is subject to income tax, if the disponer is an individual, or corporation tax, if the disponer is a company. However, if the land in question is residential development land a special 20% tax rate applies.
In relation to the current 20% CGT rate, down from 40%, for residential land, this was introduced in the 1998 Finance (No. 2) Act on foot of the first Bacon report on the housing market. This Act provided that disposals of land with planning permission for residential development would be subject to a reduced rate of CGT of 20% up until 5 April 2002 with a new 60% rate to apply for disposals from 6 April 2002 onwards. This revision of the CGT regime for residential development land was designed to incentivise the early release of land suitable for housing development. This provision was subsequently amended in the 1999 Finance Act to provide that all land zoned for residential development would be liable to a 20% CGT rate when disposed of before 5 April 2002. Later, provision was made in the Finance Act, 2000, to extend the 20% CGT rate to disposal of non-residential development land also.
