Skip to main content

New Irish Property Tax...

More pain as households hit with new €100 ‘property’ tax...

ALMOST all households are set to be hit with a new €100 service charge to be announced this week, the Irish Independent has learned.

The Cabinet will sign off on the combined water and property tax tomorrow, despite the easing of the debt burden under the new EU bailout deal.

Environment Minister Phil Hogan is coming under pressure to exempt those on low incomes from the new tax, which will result in middle-income earners paying more.

The Government is expecting to bring in upwards of €150m from the charge.

The flat-rate levy, to be introduced next year, will be the first tough decision to be taken by the Coalition that will prove unpopular to the overwhelming majority of people.

The options for the annual charge range from €100 to €200 a year. The likely outcome is a sum at the lower range of €100, with a small number of exemptions -- the solution favoured by Mr Hogan. However, this will have to be approved by the Cabinet.

"If you go into massive numbers of exemptions, you won't raise the funds required. The idea is to have a small amount and a small number of waivers," a source said.

There are 1.8 million households in the country and only about 10pc of homes -- between 150,000 and 200,000 -- will not have to pay the new tax.

However, the tax will be payable by the property owner, meaning landlords will have to pay the bill and are therefore expected to pass on the costs to their tenants in higher rents. This provision will affect a host of social welfare recipients and low-income earners.

The collection of the household service charge is expected to follow the model of the tax on second homes, which is payable on the internet.

Failure to pay the household service charge will result in penalties being applied. The amount to be paid is being announced now to give ample warning before its introduction in January.

The funding will go directly to local authorities and the councils' grant from central government will be reduced by the same amount.

After promising to let people know how much they will be paying before the Dail summer break, there was some doubt cast last week over whether the decision would be kicked to touch again.

The charge will form part of the €3.6bn worth of additional taxes and spending cuts in next year's Budget.

The new tax will be greeted with hostility, particularly as it comes in the wake of the new EU deal resulting in a saving of about €1bn a year in bailout loan repayments.

Left-wing groups are already planning to oppose the tax.

However, Transport Minister Leo Varadkar said yesterday this year's Budget deficit of €18bn still had to be brought down -- regardless of the national debt or banking crisis.

Debate

The Cabinet will debate the new tax at its meeting tomorrow, with the details announced afterwards. Bringing in property and water charges was a condition of the bailout deal reached with the IMF/EU.

The Government will attempt to soften the blow by saying the new charge breaks down to just €1.92 a week and goes toward the provision of local council services, such as water, sewerage, road maintenance and fire brigades. It will argue this is the way local services should ideally be funded and is the system in place in most European countries.

The charges will be accompanied by a PR campaign to explain where the funds go.

The rollout of the new household service charge will be a precursor to a property tax.

The Cabinet is also due to discuss the installation of water meters in every house in the country. But this scheme will take several years to introduce.

Once houses are metered, water charges will be introduced.

Householders will be given a basic allowance of water for free and pay for anything they use over and above that amount.

The formal property tax will also come in once a valuation system is set up.

Rather than a flat-rate charge, the sum to be paid will be based upon the value of the house or its size.

Again, such a comprehensive valuation system will take several years to establish.

Report by Fionnan Sheahan - Irish Independent

Popular posts from this blog

Ireland's Celtic Tiger Excesses...

'Bang twins' may never get to run a business again... POST-boom Ireland is awash with cautionary tales of Celtic Tiger excesses, as a rattle around the carcasses of fallen property developers and entrepreneurs will show. Few can compete with the so-called Bang twins for youth, glamour and tasteful extravagance. Simon and Christian Stokes, the 35-year-old identical twins behind Bang Cafe and exclusive private members club, Residence, saw their entire business go bust with debts of €9m, €3m of which is owed to the tax man. The debt may be in the ha'penny place compared with the eye-watering billions owed by some of their former customers. But their fall has been arguably steeper and more damning than some of the country's richest tycoons. Last week, further humiliation was heaped on them with revelations that even as their businesses were going under, the twins spent €146,000 of company money in 18 months on designer shopping sprees, five star holidays and sumptu

I fear a very different kind of property crash

While 80% of people over 40 own their own home just a third of adults under 40 do. This is disastrous for social solidarity and cohesion Changing this system of policymaking requires a government to act in a way that may be uncomfortable for some. Governments have a horizon of no more than five years, and the housing issue requires long-term planning. The Department of Public Expenditure and Reform was intended to tackle some of these problems. According to its website its remit is to “drive the delivery of better public services, living standards and infrastructure for the people of Ireland by enhancing governance, building capacity and delivering effectively”. So how is the challenge of delivering homes for people in 2024 and beyond going to be met? The extent of the problem is visible in the move by companies, including Ryanair, to buy properties to house staff. Ryanair has, justifiably, defended its right to do so. IPAV has long articulated its views on how to improve supply an

Property Tycoon's Dolce Vita Ends...

Tycoon's dolce vita ends as art seized... THE Dublin city sheriff has seized an art collection and other valuables from the Ailesbury Road home of fallen property developer Bernard McNamara. The collection will be sold to help pay his debts. The sheriff, Brendan Walsh, is believed to have moved against the property developer within the past fortnight, calling to his salubrious Dublin 4 home acting on a court order to seize anything of value from his home to reimburse his creditors. The sheriff is believed to have taken paintings from the family home along with a small number of other items. The development marks a new low for Mr McNamara, once one of Ireland's richest men but who now owes €1.5bn . The property developer and former county councillor from Clare turned the building firm founded by his father Michael into one of the biggest in Ireland. He is the highest-profile former tycoon to date to be targeted by bailiffs, signalling just how far some of Ireland's billionai