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Donohoe doles it out, but confusion over hike to tax on property sales

11 October 2017 01:31
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Donohoe doles it out, but confusion over hike to tax on property sales

Finance Minister spreads €1.2bn package far and wide to ensure most people will benefit a little

The €1.2bn package has been designed to ensure most people end up with a little more in their pockets. Working families set to gain around €8 a week from tax changes.

Cuts to USC and income tax are to be funded with a steep hike in commercial stamp duty, a levy that will hit large property transactions.

But Opposition TDs immediately questioned the logic of relying on property-related taxes to pay for social welfare hikes.

The move also sparked a backlash from farmers as it looks set to be applied to agricultural land sales.

This is the fourth budget to give something back, this time with changes to USC and tax bands - but those in receipt of mortgage interest relief will see many gains wiped out.

The phased reduction in the mortgage relief for boom buyers will see around 400,000 homeowners lose up to €450 annually from next year, according to figures from KPMG.

In a bid to raise more revenue and improve the health of the nation, Mr Donohoe announced increased taxes on sugar-sweetened drinks, cigarettes and the use of sunbeds.

But most families are still set to benefit from changes in income tax, an extension of the childcare programme, and extra money to ease the cost of medicines.

A widening of the tax band worth €150 year to a family with one earner.

Mr Donohoe is gambling that his decision to bump up stamp duty on commercial property transactions will bring in €376m to largely fund his give-aways.

However, there was major confusion last night as to whether the hike in stamp duty would hit the sale of agricultural land.

Agriculture Minister Michael Creed told reporters that farm land would not be included in the new measure. But senior finance sources confirmed to the Irish Independent there will be no exemption for agriculture land sold on the open market.

"If the land is being sold as a farm, then the buyer will have to pay the new 6pc rate of stamp duty. If it is being sold as a site for residential development, then the tax won't apply," said the source.

Exemptions are already in place for farms sold within families or for some young farmers buying land.


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