Hike in stamp duty on commercial property being considered
Measure is one of several being mulled to offset budget tax cuts and spending increases
Minister for Finance Paschal Donohoe: also considering the old favourites of hiking excise on tobacco and alcohol. Photograph: Brenda Fitzsimons
A rise in stamp duty on commercial property is being considered as one of the main revenue-raising measures in the budget, as the Government searches for money to fund income tax cuts and spending increases.
Substantial increases in some taxes are being considered for the budget, with Minister for Finance Paschal Donohoe attempting to reconcile demands for spending increases and income tax cuts with the declared priority of balancing the budget next year.
People with knowledge of the budget process say Mr Donohoe and his senior officials are considering “very significant revenue-raising measures”, including increasing stamp duty on commercial property transactions and hikes in excise duties on tobacco and alcohol.
Sources indicated that one measure in particular – understood to be stamp duty on commercial property – will raise more revenue than others.
The tax strategy papers, published earlier this summer as part of the budgetary process, pointed out that recent years have seen stamp duty fall from 9 per cent to 6 per cent, and eventually to 2 per cent on commercial property in budget 2012. It is calculated that every half a percentage point increase in commercial stamp duty would yield €47 million, raising the prospect that a 1 per cent increase would bring in almost €100 million.
Such a move is likely to be more palatable politically than other tax changes, such as an increase in the 9 per cent VAT per cent rate for the tourism sector, although a partial rise on the special VAT rate is under consideration.