Sean Barrett (Independent) | Oireachtas source

There is a worrying part of the explanatory memorandum indicating that the real estate investment trust, REIT, may carry on other "residual" businesses. The clause that alarms me is that "the tax exemption applies only to the income and chargeable gains of the property rental business." We discussed earlier with Senator Hayden the danger that we return to where we were when "the tax exemption applies only to the income and chargeable gains of the property rental business." These tax subsidies to property have caused so much trouble in the past and precipitated the problems that the Minister of State, the Minister for Finance and the Minister for Public Expenditure and Reform must deal with on a daily basis, and which this House must confront.

Are there early warning systems or safeguards in place? I appreciate the points made by my good friend, Senator Hayden, that there may be shortages in the property market but this would mean we are going back so soon to a system which did so much harm to the country. The Minister, Deputy Noonan, could brief the Minister of State on that. My fear is that land and property speculation has been extremely damaging, and we should allow prices to fall even further. There is a concern that tax exemption for properties is detailed in the explanatory memorandum for this section. Do we need such a provision again?

From 2003 onwards we found it difficult to shut off these systems. Are safeguards built into this so that we will not precipitate another property bubble, as we probably had the world's worst property bubble, apart from South Africa, according to The Economist? That was fuelled by fiscal privilege and I am concerned about the impact of it in this section.