Wednesday, October 03, 2007

This is what happens when your budget depends on land transfer tax

One of the reasons I have been sceptical about the land transfer tax (or "moving tax") is that it's hard to budget revenues for a sector that is prone to booms - and serious busts. David Miller should heed the following warning, based on the latest reports from the Irish Department of Finance who call LTT "stamp duty":
"The bottom line is that this will be the most difficult budget Brian Cowen has had to preside over," said Alan McQuaid in Bloxham Stockbrokers.

The problem is slumping revenues from the reduction in house building and stalled house sales.

Stamp duties brought in €400m less than expected and taxes on profits from property sales are more than €100m below estimates.

It makes one wonder how much of the current Ontario surplus is built on the Toronto property boom and the land transfer tax take that went with it, and what happens if that boom levels off, or worse still slows down.
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