Smart Taxes is delighted to see the continuing informative and well researched posting on the ‘Ireland after Nama’ blogsite based in Maynooth. The background of the bloggers is geography although not exclusively : economics is however, not their not their main field of expertise. So we are chuffed to see their thinking and arguments develop from within their particular perspective for what amounts to an annual land value tax, in effective replacement for stamp duties – as we advocate in Smart Taxes. There are very serious issues about the transition from a transaction property tax regime, which is stamp duty, to a rental charging regime which is annual land value taxes; – the subject of this posting on the website.
“One suggestion may be that Government immediately indicate that stamp duty and property taxes will become aligned and integrated. The easiest way to do this might be to suggest that for anyone moving now, their stamp duty liability can be paid over the next 10 years rather than in one lump sum on the day of purchase. Thus in our example above, the buyer would pay close to €1600 per year for the next ten years. Once the proposed property tax is introduced, two things could be done.
* In Scenario 1, the purchaser above continues paying their €1600 per year stamp duty until the 10 years is up and then switches over to paying the property tax. There is no double taxation at any time.
* In Scenario 2, the purchaser above continues paying their €1600 per year stamp duty until the property tax is introduced. They then pay the greater sum – either continuing as in Scenario 1 above or switching to the property tax if that is appropriate. Again, there is no double taxation at any time.
Doing something along these lines will achieve two things. Firstly, it will give greater certainty to those contemplating a move that they will not be taxed multiple time on the same property. However more importantly, it removes the immediate burden of a family finding a large stamp duty lump sum at a time when credit is tight and they may already have significant difficulty in finding the cash to finance the deposit on a new home.” (link to article)
