Submission to the Commission on Taxation and Welfare on introducing a site value tax

TL;DR

This paper advocates for implementing a site value tax in Ireland to stabilize property prices, reduce speculation, and fund infrastructure, addressing economic and social development challenges caused by high property prices.

Contribution

It proposes a novel policy approach by introducing a site value tax in Ireland, highlighting its potential benefits for economic stability and development.

Findings

Site value tax can reduce property price volatility.

It diminishes incentives for land speculation.

It can finance infrastructure and support development.

Abstract

This submission to the Irish Commission on Taxation and Welfare advocates the introduction of a site value tax in Ireland. Ireland has high and volatile property prices, constraining social and economic development. Site values are the main driver of these phenomena. Taxing site values would reduce both the level and volatility of property prices, and thus help to alleviate these problems. Site value tax has many other beneficial features. For example, it captures price gains due to the community and government rather than owners' efforts and thus diminishes the incentive to buy land for speculative reasons. Site value tax can be used to finance infrastructural investments, help facilitate site assembly for development and as a support for the maintenance of protected structures. Site value tax is also a tax on wealth.