Minister of State for Housing Noel Ahern has said the Government should levy infrastructure costs on the owners of second houses but added such measures should not force people to invest abroad in property.
Mr Ahern was responding to a report from the Conference of Religious in Ireland (Cori), which said that people buying holiday homes should pay the full cost of connecting them to the electricity, water and telephone networks.
While the Minister of State said the Government "certainly should be getting some money from those people", he warned against introducing a system that would discourage them from buying in Ireland.
"If you just tax them too much, you just drive them all out of Ireland and it's not just the investment of the unit they are buying. It's where they spend their holidays and their weekends thereafter," he said on RTÉ.
He added that many second homes and investment properties were being built under tax-relief schemes, which are due to expire in the middle of 2006.
Cori director Fr Seán Healy took issue with an Irish Times report on its policy briefing on housing which said Cori had called on the Government to introduce "financial penalties" on second homes.
Stating that Cori never used the word "penalty", he said the body was repeating a call by the Economic and Social Research Institute that owners of second homes and investments should bear the full cost of connecting them to service networks.
"It's not an issue of advocating penalties," he said.
However, homebuilders rubbished the proposal. "It's unfair to say that anyone with a second home is being subsidised by the State," Hubert Fitzpatrick, director of housing at the Construction Industry Federation said. "Rather, they are net contributors to the Exchequer on an overall basis."
Mr Fitzpatrick said all new housing developments had been subject to increases in the development levies in the past two years and said such levies had increased fourfold in some cases.
The buyers of any new homes paid up to 40 per cent of the purchase price to the Exchequer in one form or another, he said.
