Three-quarters of Irish property developers say stamp duty plays a key role in driving property investment abroad, with 18 per cent citing it as the predominant constraining factor for future growth, according to a survey by PricewaterhouseCoopers and Amárach Consulting.

"The impact of stamp duty is seen as a big constraining factor in the Irish market," said Enda Faughnan, tax partner with PwC.

"It represents 7 per cent of total tax take, which is extremely high by international standards."

Stamp duty accounts for 4 per cent of total tax take in the UK, he said.

While the survey showed continuing confidence among investors for property growth this year, 10 per cent expected negative growth for residential property in 2007, while nearly three-quarters said the residential property market had peaked. However, some 24 per cent expected more than 7 per cent growth for residential property.

There was much greater optimism for commercial property, with 40 per cent expecting growth of 7 per cent and a further 9 per cent saying this growth would be 12 per cent or more.

Investors also see banks becoming more cautious on property lending compared to a year ago, with three-quarters agreeing that banks are now more guarded. Mr Faughnan said this was driving some investors towards other sources of equity such as high net-worth individuals and hedge funds.

Rising interest rates, land costs and labour costs were cited as major influences on the market, while more than 80 per cent said the Irish planning process hindered investment. Britain was ranked as the number-one country for overseas investment.