Council tenants may pay new tax with increase in their weekly rents
Published 07/12/2012 | 05:00
COUNCIL tenants face the prospect of paying the property tax from next year through a hike in their weekly rent bill.
Local authorities have been told they are liable to pay the tax on properties they own, in a move that will affect up to 140,000 families throughout the State.
The Department of Finance has confirmed that city and county councils will escape the tax only in exceptional cases.
Where housing is provided for someone with special needs, such as the elderly or disabled, an exemption will apply.
The 34 councils nationwide own 140,000 houses and apartments which are rented to people who cannot afford to provide their own home.
The annual bill is likely to be more than €25m, which is based on each property being worth €100,000 and incurring a €180 annual tax bill.
Sources said that among the options being considered by councils was to pass the tax on to tenants, adding €3.50 a week to their rent at a time of spending cutbacks announced in Wednesday's Budget.
The move will also impact on voluntary housing associations which provide homes to the least-well off.
The Cluid Housing Association, which owns 3,500 homes, said the tax would have a severe impact on its finances.
"If we are liable for it, it will be a very significant cost to us at about €600,000," said head of policy Simon Brooke.
"It's not possible to produce social housing without a subsidy, because you are providing accommodation for people who cannot afford to buy their own homes.
"Because we're a social housing provider, we depend on a government subsidy to balance our books.
"We would be returning a significant portion of that back to the Government."
Worst-hit will be Dublin City Council, which has 26,500 homes. It faces an annual bill of more than €4.5m.
Cork County Council has 6,800 units and could be hit with a €1.2m bill, while the smallest local authority, Leitrim, will incur a bill of €180,000.
The Local Government Management Agency, which represents local authorities, said councils were only made aware of the details of the property tax and could not yet comment.