Noel Coonan (Tipperary North, Fine Gael)
Link to this: Individually | In context

Question 37: To ask the Minister for Finance the evaluation he has undertaken in respect of the recently introduced windfall tax on rezonings after 30 October 2009; his assessment on its economic impact and the revenue it will earn; and if he is satisfied that there will be no unintended impacts of a tax measure. [44788/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
Link to this: Individually | In context

The windfall tax rate of 80% was introduced under the National Asset Management Agency Act. The 80% rate will apply to the portion of any profit or gain made on the disposal of land which is attributable to a rezoning, where both the rezoning and the disposal of land giving rise to the windfall occur after 30 October 2009. The 80% rate only applies to the portion of the profit or gain on the disposal of the land which is attributable to a rezoning. The balance of any profit or gain will be taxable at the Capital Gains Tax rate of 25%, where the disposal gives rise to a capital gain, or at the appropriate Income Tax or Corporation Tax rate, where the disposal is part of a trade of dealing in or developing land.

The rationale for taxing this part of the profit or gain at a higher rate is because it is attributable to an administrative decision – that is, to rezone the land – rather than to anything done by the landowner.

In the current economic and property climate, it is difficult to estimate how much the windfall tax will yield. Obviously this will depend on various factors, including the number of relevant transactions and the value of the land being disposed of.

As with any measure being implemented, it is impossible to foresee all its possible effects, but the Government took a wide range of factors into account before deciding to implement the measure. However, as the Deputy is aware, all taxes and potential taxation measures are constantly reviewed in the context of the Budget and Finance Bill.