New 'Property Tax' Will Happen...

Confusion as Hogan insists 'property tax' will happen...

Environment Minister Phil Hogan insisted last night that a new flat-rate household charge -- a precursor to a property tax -- would come in next year.

The minister's statement of intent came following confusion created by Taoiseach Enda Kenny and Tanaiste Eamon Gilmore, both of whom said no formal decision had been made.

The household charge will be used to pay for local services and will ultimately be replaced by a full property tax based on the value of the home.

The Government will also bring a separate water charge, once houses are metered. But the details of this rollout will also have to be sorted out by the Government.

Following the split over Enterprise Minister Richard Bruton's proposals to cut wages for low-paid workers, the Coalition was again forced to deny a clash between Fine Gael and the Labour Party.

Despite Mr Hogan clearly signalling a new property tax-style charge would be introduced from January 1, 2012, Mr Kenny and Mr Gilmore were giving off different signals -- saying no decision had been made.

Doubts

In the latest example of muddled government communications, Mr Kenny failed to back Mr Hogan after Mr Gilmore cast doubts over the new tax.

When asked about the proposals, Mr Gilmore said the Government had not considered a household charge.

"What is in the Programme for Government is a proposal in relation to metering for water. The proposals on how that might be implemented has not yet been finalised by Government," he said.

Mr Kenny sided with the Tanaiste rather than supporting his Environment Minister's statement when asked if the charge would come in next year.

"The Government has not made a decision in regard to this yet and when the Government do make a decision on that, obviously everybody will know about it," he said.

"What we signalled here through the Minister for the Environment was the Government's intention of following through on the Programme for Government and the conditions that are attached to the EU/IMF bailout."

However, Mr Hogan said there was no change in his position -- with his spokesman reiterating that it was "the minister's intention to introduce a household charge in January next, pending Cabinet approval".

Mr Hogan continued to insist the new so-called household charge was not a combination of a property tax and a water charge.

He said the EU/IMF deal required the Government to introduce a property tax next year, which would be based on the value of a site.

Until sites were valued, an interim property tax -- the household charge -- would be put in place.

The money generated would be used to fund services provided by local authorities such as libraries, fire services and street lighting, but he admitted that some could be used to fund the water-metering programme which will begin next year.

"The household charge is a charge on each household for the purpose of providing money for local services," Mr Hogan told the Irish Independent.

"There'll be no flat-rate water charge. The only time you'll have a charge on water is when the metering programme comes to a conclusion in 2013/2014."



Report by Paul Melia and Fionnan Sheahan - Irish Independent