Nama will not have to pay any tax on properties it disposes of after the Attorney General said it would increase the administrative and legal burdens on the organisation.

The decision was taken after a consultation with the Revenue Commissioners and the Office of the Attorney General. The Sunday Tribune understands it was debated over several weeks. Originally Nama planners believed exempting the body from tax would distort the property market. Exempting Nama would give the state an unfair advantage when doing property deals, it was thought.

However the Department of Finance concluded that taxing the proceeds would only involve moving money from one part of the exchequer to another. "The main aim was to prevent circulator flows of revenues," said the Department last week. There was also an attempt to prevent complexity in the design of Nama.

The Revenue Commissioners declined to comment on the potential loss of tax. The Department said there was still a chance the legislation could be amended, but this is thought unlikely.

The Revenue Commissioners collected large amounts of revenue from property sales in the boom years, although this source has significantly dried up since the recession. However Nama envisages a seven- to nine-year property cycle and towards the end of this period, the potential revenues from property sales could be significant. However the Department asserts that the overall effect of the tax provisions will be revenue neutral from the point of view of the state.

Meanwhile the bonds that Nama will issue to the main guarantees institutions will be "issued subject to the condition that the interest on those debt securities shall be paid without deduction of tax".