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Source:http://www.rte.ie/news/2009/1202/revenue.htmlProperty developers were able to avail of a special lower rate of income tax of 20%, it has emerged this evening.
The Revenue Commissioners said the special rate of tax ended in January 2009.
The 'Special Incentive Tax Rate' was introduced in the Finance Act in the year 2000.
Yes, I know.This should come as no surprise to anybody.
This is how very rich people manage to pay 15-20-25% tax.
Why should the sale of land be any different to the sale of any other asset?
If an incentive was needed (and I'm not at all sure that it was), perhaps it should have been stick, rather than carrot. A punitive CGT rate kicking in 1/2/3 years ahead for sites held for more than 3/4/5 years would have done quite nicely thank you.I will admit that the incentive was probably needed when first introduced in order that builders would release swathes of land so that house could be built without mountains of their profits being eaten up in income tax but it just ended up being carried on for too long and resulted in extortionate profits ending up in builders profits.
I don't believe that it is that complex.
The sale of the land by builders/property developers, under all normal revenue criteria, satisfy the badges of trade tests which would normally make these transactions taxable under the income tax regime as opposed to the CGT regime.
That's pretty much what happened earlier this year with the pension levy, and now they have come back for more.Mind you -once you start with tax measures that single out a particular sector, where do we stop: should we just tell the public sector unions "pay cost must come down by 10%, we don't care how we do it; you can propose a solution now, and if it doesn't work, next year there is an extra 10% on the income tax rate for every person paid from the public purse". ?
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