Eamon Ryan (Dublin Bay South, Green Party)
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8. To ask the Minister for Finance if he has considered the reintroduction of a tax on super-normal profits - in the context of profits generated by the rezoning of land - as a mechanism for reducing the price of land, which is increasing as a result of ongoing speculation. [33188/17]

Eamon Ryan (Dublin Bay South, Green Party)
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In the Green Party's period in government we helped to introduce a tax on super-normal profits relating to speculation in land. This is an essential measure to try to avoid a return to the housing bubble conditions and to bring down the cost of building. It is interesting that the Society of Chartered Surveyors Ireland said earlier today that the cost of building in Dublin is incredibly high, largely due to high land prices. Will the Department of Finance consider reintroducing such a tax and what would the arguments be against such a measure?

Paschal Donohoe (Dublin Central, Fine Gael)
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I am advised by Revenue that the National Asset Management Agency Act 2009 amended the Taxes Consolidation Act 1997 by providing for an 80% windfall tax on profits or gains arising from disposals of development land to the extent that those gains were attributable to a relevant planning decision.

Section 31 of Finance Act 2014 repealed the 80% tax rate on these profits or gains with effect from 1 January 2015.

The impetus for this latter amendment to the Taxes Consolidation Act 1997 came from the views expressed by various parties in both the private and public sector, with which the Minister for Finance at the time agreed, that the windfall tax provisions were acting and would act as an impediment to land rezoning, land development and redevelopment and to land sales for development.

The reintroduction of such a windfall tax on a similar basis is likely to act as a disincentive to landowners to dispose of such property, which could be detrimental to the Government policy to encourage home building.

The Department of Housing, Planning and Local Government is developing a new national planning framework, Ireland 2040 Our Plan. It will provide a national planning framework to guide national, regional and local planning and investment decisions for the years ahead, building on and co-ordinating the existing regional and local authority planning processes.

Eamon Ryan (Dublin Bay South, Green Party)
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Does the Minister agree with Mr. Justice John Kenny's 1973 report which said that the profits accruing from a public decision to rezone land rightly belong to the public rather than the developer? The report found that the lack of such a tax on the profits that accrue from a rezoning decision leads to a tendency to hoard land. Rather than being a disincentive for owners to dispose of land, it is actually an incentive for people to speculate on, store and hoard land. Have we learned nothing from that Kenny report? The legislative provision to which I refer was introduced as a practical way to introduce Mr. Justice Kenny's recommendations. There would have been constitutional difficulties in the context of interfering with property rights but a tax on super-normal profits was a very real and practical way of getting away from the incentive to speculate on or hoard land, which is contributing to increases in the cost of accommodation. Does the Minister disagree with the Kenny report? Does he not think that land hoarding and the whole game regarding land speculation were two of the main causes of the property crisis? Why would the Minister not try to tackle that problem at source?

Paschal Donohoe (Dublin Central, Fine Gael)
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I agree with many of the points made by Deputy Eamon Ryan. The hoarding of land and the lack of supply of land, especially the lack of zoned land and the pricing thereof, lies at the heart of many of the difficulties we are now facing in the housing market. I accept much of the analysis the Deputy has offered on this issue. Where I differ with him on the introduction of a so-called windfall tax would be in the context of the point at which the tax liability is calculated when a transaction goes through. My concern is that this would act as an impediment to the release of land to allow more homes to be built. I wish to highlight the measures we have brought in, such as the vacant site levy, and the fact that capital gains tax relating to the type of land we are discussing stands at 33%. I introduced an increase in stamp duty on commercial property in the budget, which is another way of achieving the objective of increasing the availability of land for residential development. It is a concern that bringing in a tax measure of the kind suggested and of such magnitude would actually impede the release of land for the delivery of homes.

Eamon Ryan (Dublin Bay South, Green Party)
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The Minister agrees in principle to the tax but he disagrees with the timing. Am I right in that interpretation? Is it that it would act as a disincentive? When will the time be right for us to attack this fundamental lack of justice, as well as the rot which lies at the centre of the high-price housing and property bubble instincts that exist in this State? When will be the right time to introduce such a tax? Are we for ever to agree that the profits accruing from a council decision to rezone lands belongs to the landowner and not to society? The Green Party introduced the tax on super-normal profits and, as I recall, the main argument given when it was removed was that it had not raised any revenue. It had not raised revenue because the State was in the middle of a slump. That was the right time to introduce it. If we do not reintroduce something of that nature now then when will we do it? Will it be when another bubble develops?

Paschal Donohoe (Dublin Central, Fine Gael)
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As already stated, I agree with much of the analysis relating to the issue. I clearly said that I disagree with the solution the Deputy is proposing. I was clear on that. I disagree because it is my view that bringing in a tax such as that to which the Deputy refers could actually slow the release of land for the development of homes. That is my analysis of the issue.

When seeking to ensure that the taxpayer, or the State, benefits from gains that are conferred by zoning decisions, this happens through the use of capital gains tax. This tax is based on the price at which the land is sold. In turn, and as the Deputy is aware, that price is influenced by the zoning decisions to which he refers.

Eamon Ryan (Dublin Bay South, Green Party)
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That is 6%-----

John Lahart (Dublin South West, Fianna Fail)
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I thank the Minister.