Mr. Tom McDonnell:

I would not go so far as to say it will result in ghettoisation or gentrification. However, I believe basing it on market value is probably less susceptible over the long term to the creation of the type of effect that a site valuation tax would have. That is not to suggest I believe that would happen. Nevertheless, it is a greater risk. Ultimately, basing the tax on the value of the wealth asset - the property, be it principle or private - should be the basic system employed. It is possible to have a maximum cap in terms of the proportion of income a person would pay. Again, we would advocate that that would be a parity, ability to pay and deferral system. While over the longer term the risks vis-à-vis ghettoisation or gentrification do appear, unfortunately every tax and public service created has a behavioural effect on the economy. There is no doubt about that. There are winners, losers and unintended consequences, as evidenced from some of the property based tax reliefs over the past decade, which relate to other factors.

We are calling for the tax to be introduced in this year's budget and to apply from next year. It needs to be done quickly and at a reasonably high level and should probably be increased in future years. Ultimately, from an economic efficiency perspective and from an equity point of view, we believe the evidence favours the type of model we are proposing.