Property tax not a done deal, says Irish prime minister

A tax on Irish property is not a done deal as part of efforts to squeeze the burgeoning budget deficit, the prime minister said in an interview yesterday.

"I'm not wedded to property tax," Brian Cowen told the Sunday Independent.

"But I don't want that to be suggested that we are not prepared to take the decisions that need to be made if that is what is deemed necessary."

"We have very low taxes on property in this country, if any."

Ireland's Commission on Taxation has finished a government-sponsored report on possible changes to the system of taxation starting next year and local media have reported that it has recommended introducing a property tax based on each home's value to replace a stamp duty tied to property sales.

Ireland is targeting €1.75 billion (Dh9.2bn) in additional tax revenues and €2.25bn in spending cuts next year on top of existing measures unveiled as part of a five-year austerity plan to get its deficit, proportionately the worst on the euro-zone, under control.

Cowen, whose popularity levels are at record lows amid dissatisfaction over his handling of the economy, faces a slew of tests in the autumn, including a second referendum on the European Union's reform treaty, the creation of a "bad bank" to deal with the financial crisis and another tough budget.

"There are a lot of difficult political decisions coming down the line," he said in a rare interview.

Cowen's Fianna Fail party suffered a rout in local and European elections but the 49-year-old said he was confident he had the support of his colleagues.

"The party knows there is a job of work to be done by government.

"People are going to have their say in terms of what the position should be," Cowen said.

Keep up with the latest business news from the region with the daily Emirates Business 24|7 newsletter. To subscribe to the newsletter, please click here.