Land plan may spark Coalition rift

A MAJOR rift is set to emerge between Fianna Fáil and its Progressive Democrat coalition partners over plans to tackle excessive profits being made on land speculation.

As an Oireachtas committee considers the constitutional implications of putting a cap on land prices, PD minister Tom Parlon has dramatically intervened to say he would oppose any weakening of private property rights as a means to achieve the goal of quality affordable houses.

In a hard-hitting address last week, Mr Parlon used strong ideological language to set out his implacable opposition to any alteration to property rights guaranteed in the Constitution.

He said any such approach was "gift-wrapped in an ideology somewhere left of Stalin, which has no place in a modern, dynamic, open economy like Ireland.

"Any measure giving the state the power to control the value of private assets would have major negative ramifications for thousands of property owners and would be a jump back to the dark days of the 19th century." In his address to the Parnell Summer School, he said the practical implication of such a measure would be hugely inequitable.

"What if your home, your business or your farm is zoned for development? Should you be allowed reap the benefits of this?

"In a democracy, of course you should," said Mr Parlon.

His comments seem to be at odds with the view of Taoiseach Bertie Ahern, who earlier this year asked the Oireachtas Committee on the Constitution to examiner what implications the imposition of limits or caps on the price of land zoned for development would have for constitutional property rights.

Among the options being explored by the committee which has had more than 20 oral submissions are possible limits on constitutional property rights (which would need a referendum), an increase in capital gains tax on property and site value taxes, which would discourage developers from holding onto zoned land for price speculative purposes.

Mr Ahern suggested the possibility of a cap on the price of land last April.

But it's clear any such move in that direction at Cabinet level would be strongly opposed by Mr Parlon and some of his PD colleagues, including Galway West deputy Noel Grealish.

A Government spokesman played down the notion of a rift yesterday, saying both the Taoiseach and Mr Parlon had said they wanted to free up as much land as possible for housing.

Green Party TD Ciaran Cuffe, a member of the committee, said yesterday that his party favoured a combination of higher capital gains tax and some site-value tax to ensure that land gets developed as quickly as possible and also to prevent developers from making excessive profits.