Quantifying Revenue Windfalls from the Irish Housing Market

Diarmaid Addison-Smyth, Kieran McQuinn and Gerard O' Reilly
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Diarmaid Addison-Smyth: Central Bank and Financial Services Authority of Ireland
Gerard O' Reilly: Central Bank and Financial Services Authority of Ireland

No 10/RT/09, Research Technical Papers from Central Bank of Ireland

Abstract: The speed and severity of the decline in the Irish fiscal position in recent years raises a number of important issues regarding the assessment of fiscal policy within the EU. From a position of relative strength, with large surpluses and low debt to GDP ratio, the Irish public finances have rapidly deteriorated, culminating in an Excessive Deficit Procedure being launched in early 2009. In hindsight, it is evident that tax revenues were on an unsustainable path in recent years due, in large part, to structural imbalances within the economy, mainly associated with the housing market. The excess growth in the latter culminated in large and transitory tax revenue windfalls, which ultimately proved unsustainable. These windfalls contributed to large general government and cyclically adjusted budget surpluses. This paper seeks to quantify the windfall gains associated with property taxes through modelling housing related tax receipts over the period 2002 to 2009. From this, estimates are derived as to the underlying or property adjusted fiscal position, which is found in various years, to have diverged greatly from actual outturns.

Pages: 29 pages
Date: 2009-11
New Economics Papers: this item is included in nep-ure
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Citations: View citations in EconPapers (8)

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https://centralbank.ie/docs/default-source/publica ... cquinn).pdf?sfvrsn=4 (application/pdf)

Related works:
Journal Article: Quantifying Revenue Windfalls from the Irish Housing Market (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:cbi:wpaper:10/rt/09

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