Residential property is a major component of wealth and the introduction in the Republic of Ireland of the Local Property Tax (LPT) in 2013 was a positive and necessary reform. Almost all advanced economies have some recurrent tax on immovable property.
Evidence suggest that recurrent taxes on immovable property (RP taxes) are more growth-friendly than other taxes.
The Republic's revenue yield from such taxes was 1.0% of economic output (GNI*) in 2017, while EU revenue from these taxes was 1.6% of output (GDP).
There appears significant scope to increase the yield from these taxes in order to improve Ireland's growth potential. We argue for immediate revaluation to 2019 property prices coupled with modest annual increases in the rate over a 10 year period.