Paul Connaughton Snr (Galway East, Fine Gael)
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Question 165: To ask the Minister for Finance the set of circumstances in which the proposed 80% windfall tax rate will apply to potential development land for housing in the future; if once-off building sites will come within the remit of this tax; the definition of development land suitable for housing; and if he will make a statement on the matter. [42909/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The purpose of the new windfall gains provisions is to apply a higher 80% rate of tax to the profits or gains from land disposals where those profits or gains are attributable to a rezoning decision by a local authority rather than to any value attributable to the work of the landowner. Rezoning is defined in the new provision as meaning a change in the zoning of land in a development plan or local area plan from a non-development land-use (agricultural, open space, recreational or amenity use or a mixture of such uses) to a development land-use (residential, commercial or industrial uses or a mixture of such uses) or from one development land-use to another, including a mixture of such uses. This 80% rate will apply where there is a disposal of land following its rezoning where that rezoning takes place on or after 30 October 2009 (the date of publication of the Report Stage amendment to the National Asset Management Agency Act 2009 which introduced the windfall gains provision).

This new tax rate will apply in respect of disposals by individuals or companies as part of their land dealing/developing trade or as the disposal of a capital item. The 80% tax rate will only apply to the part of the profits or gains that is attributable to the rezoning decision. Any part of the profits or gains that is attributable to other factors, such as construction operations on the land or the expectation that the land would be rezoned in the future ('hope value') will continue to be taxed at the normal income tax, corporation tax or capital gains tax rates, as appropriate.

Subject to certain specified exceptions, the provisions will affect any individual or company who disposes of land that is rezoned on or after 30 October 2009. There are only two situations where such rezoned land may be disposed of without attracting the 80% tax rate:

1. Where the land is sold to an authority possessing compulsory purchasing powers solely because of the exercise by that authority of its compulsory purchase powers or where such an authority has given formal notice that it will exercise those powers.

2. Where the land is sold by a 75% subsidiary company of the National Asset Management Agency.

The new provisions make no distinction between the disposal of a single site by a person who is not a builder or developer and multiple or ongoing disposals taking place as part of a building or development trade. However, in common with all taxation measures, I will review the application of the "windfall tax" measure to once-off disposals of sites for housing in the context of the forthcoming Budget and Finance Bill. The new provisions do not contain a definition of "development land suitable for housing" as such a definition is not required as the 80% tax rate is not confined to land that is rezoned solely for housing purposes but also applies where land is rezoned for commercial or industrial uses or a mixture of these uses.

Ruairi Quinn (Dublin South East, Labour)
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Question 166: To ask the Minister for Finance the estimated yield in 2010 of a carbon tax imposed at a rate of €25 per tonne. [42942/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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As the Deputy will be aware the potential yield in 2010 of a carbon tax depends on a number of factors and assumptions including the coverage of the tax, the timing and phasing of its introduction, and the level of exemptions, if any, provided. These issues relate to a potential Budgetary measure. In that context I would point out that it is the usual practice for the Minister for Finance not to speculate or comment in advance of the Budget on what it will contain and I do not propose to deviate from that practice.

Ruairi Quinn (Dublin South East, Labour)
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Question 167: To ask the Minister for Finance the estimated yield in 2010 of a 1%, 2%, 3%, 4% or 5% increase in the rate of capital acquisitions tax. [42943/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I am advised by the Revenue Commissioners that the estimated full year yield to the Exchequer from increasing the Capital Acquisitions Tax rate by 1%, 2%, 3%, 4% or 5% could be in the region of €10 million, €20 million, €30 million, €40 million and €50 million respectively. However, it should be noted that this estimate is based upon an assumption that there would be no behavioural impact of such an increase, which could lead to a less than expected result from a change to the tax rate. In addition, the realisation of any estimated yield from an increase in taxation on assets relating to property is subject to movements in the value of such assets, which are currently occurring in the economy.