Text of the press release sent out earlier today by Smart Taxes on our Budget Submission.
A new tax measure to help restore the public finances and prevent future property bubbles has been proposed by Smart Taxes, a network of environmentalists, economists and planning professionals. The group today released their pre-Budget Submission on implementing the tax reform.
“Only one kind of new tax can raise revenue and promote recovery and that is a Site Value Tax. The Government needs new tax measures to make up for lost income. Site Value Tax ensures that revenue-raising can be steady, fair and have positive effects on the economy and the land market,” said Emer O’Siochru, director of Smart Taxes.
Site Value Tax, already included in the Programme for Government, is a proposed annual charge on the value of residentially zoned land. It offers the Government a steady flow of income that is predictable and not dependent on transactions.
The Site Value Tax will cover all zoned land, and would therefore spread the burden wider than just households. According to Ms. O’Siochru, “Because undeveloped zoned land is also covered, the tax has a broader base and larger income than a property tax. This means that there will be enough revenue to grant several year exemptions to families that bought their homes during the boom.”
In a pre-Budget submission, Smart Taxes have set out the case for Site Value Tax, proving that it can be implemented quickly and easily. Speaking at an EEA Conference on Environmental Tax Reform, Dr. Constantin Gurdgiev of Trinity College Dublin estimated that the tax would raise more than €1.8 Billion. The full study on revenue potential will be completed shortly.
The EEA Conference saw a number of presentations on Site Value Tax. Expert speakers demonstrated that Site Value Tax has important economic and environmental effects. Unlike a property tax, it can help rescue cities from dereliction, crime and unemployment.
The Budget Submission proposes a multi-annual exemption for those who purchased during the boom period. Elderly homeowners will be able to defer their payments until their home changes hands.
The tax will replace Stamp Duty and Development Levies, upfront costs that discourage needed construction work. The tax will discourage speculation on land, preventing future property price bubbles and encouraging productive, job-creating investment.
Site Value Tax also helps spatial planning, as landowners must pay as soon as their land is zoned, discouraging excessive zoning and urban sprawl. Local authorities will have reliable annual funding to provide necessary infrastructure and services.
The tax collects much of the increase in land values caused by services and infrastructure provided by national and local government, so that increased tax revenues will gradually repay public expenditure.
For more information, including the text of the Budget Submission and further Smart Taxes research, see https://smarttaxes.org/site-value-tax/
