There is evidence for property owners hoarding land because there is an expectation for rising house prices in the future. However, this only contributes to the housing shortage crisis. If the budget for 2018 included such a tax for property owners who choose to hoard land, it will give a financial incentive to build on the land now.
Property taxes are supposed to reflect the market value on the properties but all the valuations have been halted leaving a lot of room for political unrest.
Increasing the property tax, according to John Fitzgerald from the Irish Times, will give the government extra proceeds to fund for housing. This will give incentive to better utilize properties and give extra cash to the government to help out with the housing shortage.
It will also allow people with homes help the issue for those who want a home but can not because of the shortage.
This is not the first housing shortage Ireland has seen over the last 50 years. With one in the late 1960s and early 1970s, the Celtic Tiger years, and the one we are seeing today.
The mistake in the reaction to the housing shortages was the supply of housing is very slowly trying to meet up with the increase in demand. If there was a financial incentive to the suppliers of homes, we can increase the supply to catch up with demand which will bring the house prices back down.
This is the goal but there has to be an incentive for suppliers. That’s why a increase of property tax can help solve this issue potentially. Especially with the response of homes supplied is slower than the previous shortages.
As the housing shortage continues to get worse as time goes on this could be a simple solution. Increasing property taxes can give incentive to the people who are hoarding land for their own financial gain instead of helping the crisis.
In reference to John FitzGerald: Tax on hoarding land would incentivise building by John FitzGerald in the Irish Times on 7 July 2017.