IMF proposes a new property tax

FINANCE Minister Brian Cowen should ignore calls for a tax giveaway in the next Budget and instead bring in a new property tax, the International Monetary Fund (IMF) said yesterday.

The IMF said, in its annual health-check of the Irish economy, that current tax policy needed to be changed to reduce the risk of overheating the economy. It also said the use of artificial supports that currently prop up the housing market should be curtailed.

It called for limits on property-related tax incentives, the retention of a ceiling on mortgage interest relief and a new property tax to help cool down the market. IMF directors said the Government needed to be “prudent” in its handling of the public finances in this year’s Budget and should hold on to any revenue windfalls instead of handing them back to taxpayers.