Monday 2 November 2009

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Windfall Tax will have a devasting effect on the market.

REA agents think the proposed 80% windfall tax will have a devastating effect on the Market for one off sites as well as for any proposed sale of land in the future close to towns/cities which could be developed.

Many people through no fault of their own have land close to towns frozen for proposed by-passes for 10 + years and now that could be subject to the 80% tax. They could have sold or developed it if it was not frozen.

As sure as night follows day, we will slowly come out of this recession and if the 80% tax stays it will drive up the price of houses again because land will not be released for sale because of punitive taxes.
The 40% capital gains tax of the 1980’s and early 90’s prevented the release of land for development so we can only speculate what will happen if the 80% windfall tax is introduced.

Hynes believes the worst in over and things are straightening out

"We've seen a steady improvement in house sales since the start of this year, particularly since last August and September," said Hynes. "Confidence is a bit better. People realise there's value to be had out there. Sales are thousands of times better than this time last year."

Hynes believes the property market went into recession about a year before the rest of the economy, and is more likely to recover before other sectors. "There is an upturn slowly coming through," said Hynes. "The worst of the downturn is gone."