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COMMISSION ON TAXATION REPORT PUBLISHED
The much anticipated commission on taxation chaired by Mr. Frank Daly has today issued its full report. The comprehensive document extending to over 500 pages sets far ranging suggestions in terms of amendments to the existing tax system. The report proposes an annual property tax, water charges, a carbon tax and a simplification of the existing income tax system.
Possibly the most controversial of the proposals is a property tax which is unlikely to be put forward by the government to the electorate given that is would be too politically damaging. However, specifically the report has identified the following in terms of a property tax
· The provision of an up to date valuation base for all property and land in Ireland should be addressed as a priority issue.
· Provide for an annual property tax on all residential housing units with broad exceptions of local authority and social housing units and some limited exceptions.
· Stamp duty for purchasers of principle private residences should be zero rated.
· Stamp duty should continue to apply to investor purchases of residential units. The rate should be competitive having regard to the transaction tax rates and thresholds that apply across the EU.
· The windfall gains from increases in land values due to rezoning decisions should be subject to additional capital gains tax charge.
· A recurrent property tax on land zoned for development should be introduced.
8th September 2009 – High Court Ruling on Examiner Application due on Thursday 10th – Mr. Justice Frank Clarke is due to deliver his decision in the unprecedented second examinership application by the Zoe group of companies. ACC who are owed some €136m out of a total group debt of €1.2 billion have opposed the second application claiming that none of the six affected companies have a realistic chance of survival.
The second application by the Zoe Group have put forward far more detailed valuation and economic reports in support of their application with has been countered by ACC. Thursdays decision could have serious implications for the survival of the Zoe Group but also importantly could have far reaching implications for the NAMA and indeed the entire property market as a failure to secure examinership is almost certain to result in 6 companies and the property assets held within them being liquidated. Such a move may see a very substantial amount of property being forced on the market where there is limited demand and capacity to finance deals. Ultimately the fear for developers is that such a move may set far lower asset value than was proposed to be paid to them by NAMA.