Government must tax clever for the benefit of the economy
Sometimes, tax policy can boost a sector. One of the best examples has been urban renewal reliefs, which transformed dilapidated and derelict parts of our major cities, such as the Customs House Dock and Temple Bar areas of Dublin. Temple Bar has been transformed into one of Ireland’s top tourist destinations.
However, tax policy that over-stimulates property markets can be disastrous. When stamp duty of up to 9% was in place, an exemption was available for new properties less than 1,345 square feet — the fallout from this misguided policy is a current shortfall in larger family-sized homes (now bucking the falling prices trend due to under-supply.
