Cowen keeps Stamp Duty Tax Loophole- Costing c.€60m

[MINISTER]

The following article appeared in the Sunday Business Post of Sunday 10th February just gone. Extract below and link here
http://www.thepost.ie/post/pages/p/stor ... qqqx=1.asp


"The Minister for Finance, Brian Cowen has reversed a government decision to scrap a tax avoidance scheme used by property developers to reduce their tax bills.

Cowen decided not to introduce the proposed new law, as he believed it would have a negative effect on the property market. The law was designed to close a number of loopholes used by developers to cut their stamp duty bills.................................If Cowen signs the commencement order, the legislation would close off certain stamp duty planning techniques, such as ‘resting on contract’ and building licences. They have been widely used by developers when structuring commercial and residential property deals.

Under a late amendment to the 2007 Finance Bill, Cowen introduced new rules that, if enacted, would require stamp duty to be paid in any contract where landowners received a licence worth more than 25 per cent of the land’s value.

At the time, Cowen admitted the Revenue Commissioners believed the use of the tax loophole had become ‘‘common practice’’ in 2006, and it cost the exchequer €40 million in lost taxes last year."

It just shows how FF really are the builders party when they should be looking after all the people by ensuring tax receipts are sufficient for expenditure and not supporting a small few individuals.

The builders/developers must be delighted that they are getting value from their visit to the Galway Races Tent.

Also it was a good week for Cowen to bury this with Aherns Tribunal challenge in the offing.

[the leader]

he was probaby too busy................

[Auditor #9]

Shortly after announcing the new measures last year, Cowen commissioned a report to determine the effects that closing the loophole would have on the property market. Based on that report, he has now decided not to proceed.

‘‘The study has been received by me and I have decided, in line with the recommendations in the study, not to commence this provision at this time,” Cowen said in response to a recent parliamentary question.

So his reason is that it would take the heat out of the building going on around the place? Would it have had that effect though? Does anyone have copies of that study?

Could this be part of the 'emergency budget' theorised by youngdan a while back? (€40 million lost per year isn't an awful lot you'd think compared to the potential amount lost if the builders went on strike/hissy fit and didn't build. Still it is half the cost of the western rail link between ennis and galway or a new 25MW wind farm or electricity for 16000 homes)