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Smart Taxes Welcomes Announcement of Site Value Tax

Smart Taxes are happy to see that the Government’s Four-Year Plan, released yesterday, includes a commitment to implement Site Value Tax by 2012, with a subsequent extension to include commercial rates. We’ll be doing our best to make sure that the tax is understood and that disinformation does not prevail.

Site Value Tax will help ensure the property boom never happens again, according to Smart Taxes, the independent tax policy think-tank that first proposed the measure.

“Site Value Tax is fair and efficient,” said Emer O’Siochru, Smart Taxes director, “It will discourage speculation in land, help good planning and raise reliable revenues.”

“We query the low revenue estimates in the budget and feel that the tax could safely raise substantially more, in the order of €1.5-2 Billion.

The Government has announced that a flat charge on sites will be introduced in 2012, with the full tax implemented in 2013 after a process of valuation.

“We are pleased to see that it will also replace commercial rates, which are a tax on investment and enterprise.”

The value of land is derived from its location and the proximity of services, such as roads, public transport, and other infrastructure. Since Site Value Tax applies to all zoned land, it discourages premature zoning, hoarding and speculation.

In contrast to other property taxes, the investment of landowners to improve their property is not taxed, while owners of vacant property and undeveloped land will be encouraged to use it or put it on the market. This spreads the burden of property taxes to reduce the burden on households. It also encourages construction and improvement of existing properties, which will boost the construction sector.

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Posted in Site Value Tax.