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Assessing the Sustainable Nature of Housing-Related Taxation Receipts: The Case of Ireland

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  • McQuinn, Kieran
  • Addison-Smyth, Diarmaid

Abstract

Even by international standards, Ireland?s fiscal position was particularly affected by the recent financial crisis. As budgetary surpluses quickly gave way to significant deficits post 2007, the deterioration in the Irish public finances culminated in an Excessive Deficit Procedure being launched in 2009 and entry into a formal EU/IMF assistance programme in late 2010. Much of this deterioration was caused by the sudden and sharp decline in the Irish housing market as property-related taxes dried up. In this paper we quantify the extent of housing related tax windfall gains and losses. We find that at various times over the past three decades, there have been instances where dis-equilibrium in the Irish housing market has had significant implications for the associated taxation receipts. Examining taxation aggregates in this manner can be seen as an important complement to recent policy responses aimed at improving fiscal governance.

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  • McQuinn, Kieran & Addison-Smyth, Diarmaid, 2015. "Assessing the Sustainable Nature of Housing-Related Taxation Receipts: The Case of Ireland," Papers WP503, Economic and Social Research Institute (ESRI).
    • Handle: RePEc:esr:wpaper:wp503
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    1. Yota Deli & Derek Lambert & Martina Lawless & Kieran McQuinn & Edgar L. W. Morgenroth, 2017. "How Sensitive is Irish Income Tax Revenue to Underlying Economic Activity?," The Economic and Social Review, Economic and Social Studies, vol. 48(3), pages 317-336.
    2. David Cronin & Kieran McQuinn, 2023. "The housing net worth channel and the public finances: evidence from a European country panel," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 30(5), pages 1251-1265, October.
    3. Keith Fitzgerald & Jacopo Bedogni, 2019. "Examining the Volatility of Ireland’s Tax Base in the Paradigm of Modern Portfolio Theory," The Economic and Social Review, Economic and Social Studies, vol. 50(3), pages 429-458.
    4. Duffy, David & Foley, Daniel & McQuinn, Kieran, 2016. "Cross Country Residential Investment Rates and the Implications for the Irish Housing Market," Quarterly Economic Commentary: Special Articles, Economic and Social Research Institute (ESRI).

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