New figures reveal that a special lower rate of tax available to property developers cost the Exchequer €800m.
The tax rate was introduced to free up land for development in the year 2000 and scrapped 12 months ago.
When land is sold for development purposes it is liable for income tax, but not capital gains tax. Figures from the Revenue show the tax was used in 10,000 cases between 2000 and 2007.
Accountancy experts estimate the cost to the Exchequer was €800m over that period.
The so-called 'Special Incentive Tax Rate' was introduced to encourage the release of land for residential development.
The special incentive rate was 20% as opposed to the higher rate of tax of 42%, which was later reduced to 41%. The incentive meant that money from the sale of land was not liable the health levy or PRSI.
The special incentive rate was in place from the year 2000 until it was scrapped in January 2009.
The amount of revenue forgone by the Exchequer at €800m is significant considering urban and rural renewal tax incentives which attracted considerable criticism cost the taxman €2 billion.
Cowen, Ahern defend tax introduction
Asked about the tax, Taoiseach Brian Cowen said it was brought in in 2000 at the time there was a need to bring land onto the market due to a shortage of supply. He said it was scrapped last year because circumstances had changed. Mr Cowen said the €800m figure was not a Revenue estimate.
Former Taoiseach Bertie Ahern said when the measure was brought in, 'the place was disastrous' and he said he was now very proud to look at the quays today in Dublin.
