Millionaires? “Property” millionaires? In 2012? At the same time as the Government is levying a new flat tax of €100 per home on 80% of the homes in the country. Surely this is a case of over-indulgence in the mulled wine. You’d think…
Although the Government’s capital programme has been cut back in 2012, there is still a meaty schedule of infrastructure works – road-building and the like. And it remains an unaltered feature of Irish infrastructure spending that land which is compulsorily acquired is paid for through the nose. An acre of land might be worth €6-15,000 in terms of its existing use, but once the State decides it needs it for infrastructure, that price can rocket to well over €100,000 an acre. Not convinced? Why not ask the Limerick land-owner who pocketed €10.4m for a contribution from his land-holding so that a tunnel scheme might have been built; indeed €56.5m was spent on land acquisition in that one Limerick scheme alone.
Of course there are arguments about valuing land which the State compulsorily takes from citizens so as to improve the general infrastructure of the State. But these issues were dealt with, decades ago, when the Kenny Report was produced in 1974. In essence, it recommended that landowners be paid a 25% premium on top of the existing value of their land if there was compulsory acquisition. Successive governments – Labour, Fine Gael, Fianna Fail – all welcomed the recommendations in the Kenny report but somehow, never managed to get around to implementing those recommendations. And by the way one recommendation was a register of property sale prices which we may eventually get by the middle of 2012 – almost 40 years after Justice Kenny started his deliberations! And I’d be willing to bet that without the IMF breathing down our necks it mightn’t even be happening by 2012.
But what about implementing the rest of the Kenny report? How much would that save in 2012? €160m, the estimated sum to be collected in the flat property tax? Indeed might an urgent reform of compulsory purchase procedures not only yield more than the €160m which the flat property tax is projected to bring in, but also give the State a cheaper and more competitive means of doing business, as well as giving society in general a sense of fairness? The losers would be landowners who might have received a premium of over €100,000 an acre for their land in excess of what it was worth with its existing use; but even they would receive a 25% premium, worth €1,500-4,000 an acre.