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Ireland needs assurance new corporate tax rate would not change, says Varadkar

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Ireland needs assurances that a global minimum corporate tax rate would not change and will be implemented by all countries signing up to it, Tánaiste Leo Varadkar has said.

The Minister for Enterprise and Trade made the remarks as he addressed an audience including representatives of US business and its public sector at the Centre for Strategic and International Studies (CSIS) in Washington DC.

His visit comes against a backdrop of uncertainty over the future of Ireland’s 12.5 per cent corporation tax rate.

Ireland is under pressure to sign up to an Organisation for Economic Co-operation and Development (OECD) deal that would see the introduction of a minimum global rate of at least 15 per cent.

The Government is likely to sign up to an increase in Ireland’s corporate tax rate but only if the OECD agrees to limit the text to 15 per cent and not “at least 15 per cent”.

Mr Varadkar is using the trip to tell business that Ireland remains a “fantastic” location for investment despite the uncertainty over the future of the corporate tax rate.

He attended at round table discussion at the US Chamber of Commerce this morning and will hold meetings with US Secretary of Commerce Gina Raimondo and ambassador Katherine Tai, United States trade representative, later on Monday.

Mr Varadkar was asked about what it would take for Ireland to sign up to the OECD deal at the CSIS event.


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He said that Ireland’s position like those of other government is that setting tax rates is a “sovereign issue”.

“Ultimately we decide what our income tax rate is, what our corporate tax rate is, what our capital gains tax rate is and we’d be very loath to depart from that principle . . .

“That’s why we retain the option of not participating in any international agreement or European directive on it.

“That’s not our preference.

“We would rather be in the tent as you said both politically and economically.”

Mr Varadkar said it would “make more sense for us to be inside any global framework” as “it’s our instinct and that’s where we want to be.”

However, he said: “One thing that has worked very well for us in our system is to have this low corporation tax rate – but it’s not just the rate, it’s the reliability.

“So through boom and bust, through recession and through periods of growth, through changes in Government that rate has remained the same and low.”

He said this has allowed companies making a 30- or 40-year investment in Ireland to “know what the rules are”.

“And that’s why we’d want to keep it low and keep it constant,” he said.

“Among the things that we would be concerned about would be this idea that it would be at least 15 per cent because it might then go higher.”

Mr Varadkar said that Ireland would want to know that any agreed minimum global corporate tax rate “is the rate and it’ll stay at that rate and won’t change five years time or ten time”.

He said: “We’d certainly need to be assured that it would actually be implemented by all of the countries signing up to it.

“Obviously anything like that would have to go through US Congress, it would have to go through the European Parliament and national parliaments.

“So we need to know everyone was doing it.”

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How to value your home

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Since Revenue disclosed details of its property tax revaluation campaign back in mid-September, households around the State have started to fret about how much their home is worth.

Where just a few short weeks ago, people were talking jubilantly about how much the house across the road had sold for, now there is a fear that exuberant house prices will cause a sharp rise in property tax bills.

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‘Full house’ as property asking prices increase in all regions of UK in October

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Every region of Britain saw house asking price records broken in October, as the national average jumped nearly £5,000. 

It was the first time that every region broke asking price records since March 2007, according to Rightmove’s monthly house price index.

The property portal said this ‘full house’ of price increases was an ‘extremely rare event’.

The typical asking price for a home has jumped in all regions of Britain, and now sits at a national average of £344,445. This is according to Rightmove's house price index

The typical asking price for a home has jumped in all regions of Britain, and now sits at a national average of £344,445. This is according to Rightmove’s house price index 

The typical price of a property coming to market jumped by 1.8 per cent or £5,983 compared to the previous month, the biggest rise at this time of year since October 2015.

Asking prices are now at an average of £344,445, an increase of 6.5 per cent compared to October 2020. 

The North West and Wales both saw especially strong increases in asking prices amounting to 2.3 per cent. They reached £232,639 and £237,830 respectively. 

The South West and London both saw a 1.9 per cent monthly change, with prices reaching £359,906 and £650,683.  

The number of sales being agreed was up more than 15 per cent, compared to the same time in 2019.

Prices also increased in all property market sectors. First-time buyers saw asking prices up 0.8 oer cent to £210,672, while second steppers saw an increase of 1.4 per cent to £315,486 and those at the top of the ladder saw a 1.7 per cent rise to £630,819. Those figures exclude Central London, however. 

Rightmove put the increase down to buyers wanting to secure their new homes ahead of a potential base rate rise, which is being predicted by some for the end of the year. 

If interest rates increase, mortgage rates will go up from their current record lows.

This is already happening in some cases as lenders move to pre-empt the rise. 

The North West and Wales saw the biggest asking price rises. They increased 2.3% in a month

The North West and Wales saw the biggest asking price rises. They increased 2.3% in a month

Ups and downs: Asking price increases for the whole of the UK in the past five years

Ups and downs: Asking price increases for the whole of the UK in the past five years

The stamp duty holiday had previously been driving activity and house prices, but this expired at the end of September.

The continued price rises offer an opportunity for those who are downsizing, or do not need to buy another property, to sell up to cash out.

Tim Bannister, Rightmove’s director of property data, said: ‘Competition for property for sale remains hot this autumn, with average prices jumping by almost £6,000 in the month. 

‘Although more properties are coming to market, the level is still not enough to replenish the stock that’s being snapped up. 

‘Consequently, new price records have been set across the board, with every region of Great Britain and all of the three market sectors of first-time buyer, second-stepper and top of the ladder hitting all-time highs.’

Asking prices reached new highs for buyers at both ends of the market ¿ and in the middle

Asking prices reached new highs for buyers at both ends of the market – and in the middle

Also driving up house prices is the lack of new housing stock coming to the market, though Rightmove said the situation was slowly improving.

Its latest weekly snapshot showed that the number of new sellers coming to market was down on the same period in 2019, but only by 3.2 per cent.

Bannister added: ‘This ‘full house’ is an extremely rare event, happening for the first time since March 2007. 

‘The stock shortages started after the first lockdown, and they look set to continue with the underlying housing market fundamentals remaining strong, and an additional incentive to buy and fix your mortgage interest rate before a widely expected rate rise.’

In these ‘full house’ market conditions, with many homes being snapped up quickly and sellers having a choice of competing buyers, those buyers who have already sold their own property subject to contract or have nothing to sell are being favoured.

This has led some to put their own home on the market before they have identified a new property.  

Bannister said: ‘2021 has been the year of the power buyer, with those in the most powerful position to proceed quickly and with most certainty ruling the roost over other buyers who have to sell but have yet to come to market. 

‘One agent’s analysis that 87 per cent of their sales agreed were snapped up by buyers who were already in a position to proceed is fairly typical of reports from many agents.’ 

Despite the hot market, most homes still sell below the asking price. 

According to the latest Halifax house price index, the typical sale price is £267,587

Director of estate agent Benham and Reeves, Marc von Grundherr, added:  ‘With the market remaining particularly buoyant, those entering with a property to sell are pricing high and this has caused yet further growth where asking prices are concerned.

‘While initial asking price expectations are perhaps a little over-optimistic, to say the least, a lack of stock to satisfy demand means that homes are selling fast and for a very good price.’ 

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EU evaluating Pfizer Covid-19 vaccine for children under 12

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The European Union’s medicines regulator said on Monday it has started evaluating the use of the Pfizer-BioNTech’s Covid-19 vaccine in children between five and 11 years of age.

Pfizer and its German partner BioNTech last week submitted data that supports the use of their mRNA vaccine for young children.

The vaccine was found to induce a strong immune response in five- to 11-year-olds in a clinical trial of 2,268 participants, the companies said last month.

The European Medicines Agency (EMA) said it would review data related to the vaccine, known as Comirnaty, including results from an ongoing clinical study.

The vaccine is currently not allowed for that age group. It has, however, been authorised for use in children over the ages of 12 years in both the US and EU.

While children are less susceptible to severe Covid-19, they can spread the virus to others, including vulnerable populations more at risk of severe illness.

The EMA human medicines committee’s opinion will be forwarded to the European Commission, which will issue a final decision on the matter. – Reuters

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