Madam, - I take issue with Jim Dunne's negative view (November 26th) of the National Competitiveness Council's proposal of a new annual property tax. This tax would be an equitable and progressive move provided stamp duty taxes are reduced accordingly.
The council is right to advise moving away from transaction taxes. Despite what many people believe, stamp duty is a cheap and inequitable tax. Any coy investor will tell you that a tax rate of up to 9 per cent on property assets is inexpensive over the lifetime of that asset. In addition the "once-off" nature of the tax is highly unfair to poor people who receive bad value for the money raised. To make matters worse the tax locks in housing stock (owners are afraid to move) and adds to property inflation (as owners are likely to pay more in the belief they have a once-in-a-lifetime cost).
By way of example I met a very wealthy American who bought a house in an exclusive West Cork town 20 years ago and was astonished that he did not have to pay an annual property tax to fund local services. The stamp duty he paid 20 years ago was excellent value - for him! Residential property tax was a fair tax - and if it had been matched with a reduction in stamp duty, it would have slowed the damaging house inflation of the 1990s.
Why should we pay an annual television tax (licence fee) and not an annual property tax? The council was right to recommend the change. - Yours, etc,
CIARAN McCOURT, Parkland, Florida, USA.