Paul McGrath (Westmeath, Fine Gael)
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Question 108: To ask the Minister for Finance the cost of introducing a flat income tax of 20% while retaining the existing tax credits. [24174/04]

Brian Cowen (Laois-Offaly, Fianna Fail)
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I am informed by the Revenue Commissioners that the full year cost to the Exchequer, estimated by reference to projected 2005 incomes, of the change mentioned by the Deputy is estimated at approximately €4,200 million.

Paul McGrath (Westmeath, Fine Gael)
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Question 109: To ask the Minister for Finance the amount of tax that would be raised by charging a residential property tax on all residential properties at 0.5% of the value of the property in excess of €250,000. [24175/04]

Paul McGrath (Westmeath, Fine Gael)
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Question 110: To ask the Minister for Finance the amount of tax that would be raised by charging a residential property tax on all second and additional residences at 0.5% of the value of the property in excess of €250,000. [24176/04]

Brian Cowen (Laois-Offaly, Fianna Fail)
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I propose to take Questions Nos. 109 and 110 together.

It is difficult to estimate the amount such a tax would bring in because details on the value of all residential property are not readily available. Based on data from the CSO 2002 census, updated with 2003 figures, the number of households in Ireland in 2003 was approximately 1.4 million, and the average house price was about €265,000. This puts the total value of the housing market at some €360 billion so that, all other things being equal, a 0.5% rate of residential property tax on this tax base would yield €1.8 billion.

A Bank of Ireland report entitled Ireland, Residential Property Prospects, published in August 2004, estimated that the total value of the housing stock in Ireland in 2003 was some €380 billion. Based on this figure, a 0.5% rate would yield €1.9 billion. These estimates are notional and take no account of the income of households and their ability to pay any such tax. However, while it is possible to provide a very broad estimate based on the full value of all residential properties being taxed at 0.5%, it is not possible to estimate the yield if the tax were to be applied solely to the value of a residential property in excess of €250,000, as this data is not available at this time. Nor are there firm details of the number of second and additional residential properties in the State. Consequently, it is not possible at this point to assess the amount of tax that would be raised by charging a residential property tax on all second and additional residences at 0.5% of the value of the property in excess of €250,000.

Of course, the application of any new property tax, such as the Deputy has in mind in the question, might lead to calls for reforms of other taxes on property, for example stamp duty, which would reduce the yield. Stamp duty on residential property in 2003 yielded €528 million.

Seán Haughey (Dublin North Central, Fianna Fail)
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Question 111: To ask the Minister for Finance if he will exempt primary and post-primary schools from VAT; and if he will make a statement on the matter. [24221/04]

Brian Cowen (Laois-Offaly, Fianna Fail)
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In accordance with EU and Irish VAT legislation, most education, including primary and post-primary schools, is already exempt from VAT. This means that the schools do not charge VAT on the services they supply but they cannot recover VAT on the goods and services that they purchase. Essentially, only VAT-registered businesses which charge VAT are able to recover VAT.

I presume the Deputy is proposing that a provision should be introduced whereby primary and post-primary schools are relieved from VAT paid on purchases. It is usual for most State-funded services, such as schools or hospitals, to bear VAT on any purchases. However, I would point out that this is taken into account when Exchequer funding for such services is allocated by the Government. Given this position, I have no plans to introduce VAT relief in respect of primary and post-primary schools.