Dreaded property tax to hit average homeowner for over €300
Published 06/12/2012 | 17:00
HOMEOWNERS will be paying more than €300 tax on the average house in future as the dreaded property tax finally arrives.
The property tax will cost €180 for every €100,000 that their house or apartment is worth after being set at a rate of 0.18pc.
A higher mansion tax rate of 0.25pc will apply to homes worth €1m-plus.
Half the tax will be due to be paid next year, with a full year's tax being applied from 2014.
This means the owner of the average home faces a bill of €157 this summer.
Last night, anti-property tax groups said they would step up their campaign of opposition.
Gregor Kerr, spokesman for the Campaign Against Household & Water Taxes, said the tax was a declaration of war on people.
"Campaign members across the country will respond to this provocation by re-doubling and intensifying both the boycott of the property tax and protests against it and against the austerity agenda," he said.
The tax will be by self-assessment under the guidance of the Revenue Commissioners.
Finance Minister Michael Noonan said the tax officials will provide a guide to valuing people's home.
He added that homeowners would be free to use a valuer instead.
He said the two rates, of 0.18pc and 0.25pc, would not be varied during the lifetime of the Government.
Documents supplied by the Government yesterday state that any valuations carried out from now will be valid up to 2016.
There will be up to 19 different valuation bands, starting at €0 to €100,000 and increasing in €50,000 tranches.
If your property falls into this valuation band, the mid-point is taken and 0.18pc is applied to that figure.
So a property worth €160,000 will fall into the €150,000 to €200,000 valuation band.
The mid-point is €175,000.
As only half the tax is due next year, the property tax due will be €157.
In the following year, and after this, the property tax will be €315 for a house worth €175,000.
Nicola Meaney, a manager at accountants KPMG, said that if your house is valued at the lower end of the band you still pay tax at the mid-point.
This means those at the lower end of the band will not benefit from the lower property value.
Payment can be by direct debit, credit or debit cards, cash payments or "deduction at source" from salary or pensions.
Voluntary deferral will be allowed for those in financial difficulty.
This will apply particularly to those with mortgage payments that are so high that they dwarf their income.
From 2015, local authorities will have the power to vary the rates by 15pc above or below the central national rates.
Certain properties will be exempt from assessment. These exemptions largely correspond to exemptions from the household charge – mobile homes, newly built but unsold properties, houses in ghost estates, and homes owned by local authorities or charities.
Mr Noonan said the second home tax will cease from the start of January 2014, to be replaced by the property tax.
Some 1.1 million homes have been registered to pay the household charge out of an estimated total of 1.6 million households, bringing in €111m.
Mr Noonan warned: "I want to reassure the vast majority of tax-compliant citizens that the Revenue Commissioners will strictly enforce the local property tax, and they will collect any unpaid household charge for 2012.
"Any arrears that are not discharged before July 1, 2013, will be increased to €200 and will be collected through the local property tax system."
Sean Moynihan, chief executive of the Alone charity working with older people, said: "As we know, some older people may be asset rich but are cash poor and struggle to meet their basic needs."