IAVI president predicts surge in tax avoidance over stamp duty hike

The incoming head of the State's largest group of estate agents has warned that the increase in stamp duty on commercial property dealings runs the risk of increasing tax avoidance.

Mr Aidan O'Hogan's comments are unlikely to be welcomed by the Government, which has made a point of targeting tax loopholes and avoidance in recent years.

In a speech following his investiture, the president of the Irish Auctioneers & Valuers Institute (IAVI), said: "The penal increase in the rates of duty for commercial transactions is ... not only creating a major barrier to investment but also driving the creative tax and corporate structuring specialists into avoidance measures."

Mr O'Hogan, who is also managing director of Hamilton Osborne King, said even in the private residential market, stamp duty levels had "reached the point of diminishing returns". Homeowners were now buying holiday homes abroad or extending existing property rather than face large stamp duty bills, he said.

He drew parallels with Mr McCreevy's policy of increasing the tax take from capital gains by reducing the rate at which it was charged and said he would be pressing the Minister on the issue before the next Budget.

The IAVI president also told members at its annual meeting that problems with the Planning and Development Act 1999 and its implementation could lead to a blight of listed buildings. "In the UK and elsewhere, listing tends to add value rather than reduce it. However, it is threatening to have the opposite effect in Ireland."