Revenue is investigating a tax loophole which can allow developers to avoid paying stamp duty on land they purchase. The Minister for Finance has confirmed that in some circumstances developers can lease land and avoid paying the tax.
Stamp duty will bring in €2.7 billion this year, with most of that coming from property.
Normally, if developers buy a piece of land, they pay 9% stamp duty. But if the land is leased instead of purchased no stamp duty is payable.
When the developer builds a home and sells it, the buyer as normal does not pay stamp duty because it is a new property.
According to Fine Gael's finance spokesman Richard Bruton those savings are not being passed on to home buyers, and instead developers are making a bigger profit.
Finance Minister Brian Cowen has confirmed the Revenue is to investigate. Judging by his actions in the past, if the Exchequer is losing out he will take action to close off the loophole.
