The Department of Finance has launched a public consultation on whether to tax unused development land to address the current housing shortages.
The possibility of using taxation measures to encourage landowners and developers to build was mooted by Minister for Finance Michael Noonan in his budget speech.
The Dublin housing supply taskforce, set up under the Government’s Construction 2020 strategy, identified enough zoned land in Dublin for 45,000 new homes.
Mr Noonan is concerned that landowners are waiting for higher prices before taking steps to develop their land or sell it to others who will.
The department said the aim of its consultation paper was to assess the extent to which the taxation system could be used to encourage the development of zoned and serviced land.
The consultation, which runs until the May 8th, was not being launched with a view to introducing new property based tax reliefs or tax breaks, department warned.
“We must learn from the mistakes of the past as we prepare for the future. Property based tax reliefs were allowed to continue for too long with no clear rationale behind their maintenance. Lessons such as these must be applied in designing the Irish tax code for the future.”
The consultation document noted that the Minister for the Environment was separately developing proposals in a specific planning related context to underpin the development of priority areas identified in local authority city and county development plans.
Mr Noonan invited interested parties to make submission on several issues, including the potential interaction of such a tax measure with existing and proposed zoning, planning and building regulations.
Submissions on the potential impact of such a measure on property acquisition, development and construction decisions were also requested.
Last year, property prices rose by 16.3 per cent nationally and by 23 per cent in the capital, with rises in urban areas being blamed on housing shortages.
The Economic and Social Research Institute estimates that almost 60,000 houses and apartments needed to be built in Dublinby 2021 to meet demands.
