Noonan forced to defend property tax amid warning taxman would deduct it from wages of non-payers
Published 06/12/2012 | 10:47
FINANCE Minister Michael Noonan has defended the cost of the new property tax after repeated complaints from members of the public.
He and Public Expenditure Minister Brendan Howlin were taking part in the traditional post-Budget question and answer session on RTE’s Today with Pat Kenny show.
The new property tax was the most frequent complaint from listeners about the Budget. But there were also complaints about the cuts in the respite grant for carers, PRSI hikes for the self-employed , the €10 child benefit cut and the €250 increase in student contribution fees.
Mr Noonan said the choice had been between bringing in an income tax rise or the property tax.
“Property tax broadens the base of taxation and is a reforming measure and is better than taxing jobs. The whole thrust of the Budget was to create new jobs and increase in income tax cost jobs,” he said.
Mr Noonan rejected complaints from a listener that he would be paying more in property tax for his home in Dublin rather than someone living in a bigger house in the countryside. He said the 0.18pc rate of property tax had been deliberately pitched at a low level so that the overall cost would not be high.
And he predicted that the power being given to local councillors in future to increase or decrease the property tax by 15pc would be used.
“I guarantee you at the next election that there’ll be panels of candidates who’ll campaign to reduce property tax and there’ll be panel of candidates saying ‘we’ll increase it and give you more local services’. So it’ll be an interesting local election (in 2014),” he said.
Mr Noonan told a listener who had paid over €69,000 in stamp duty on a house worth €775,000 in 2004 that there would be no exemption for him from the property tax.
He said 90pc of houses were now worth €300,000 or less and 64pc of houses were worth €200,000 or less. He said the impact of the property tax on people should not be exaggerated.
Mr Noonan warned that the Revenue will deduct the property tax from the wages of people who refuse to pay. He said they would be able to get an attachment order- which is put in place by a court to deduct wages or social welfare payments.
"The Revenue know how to collect taxes and they will collect taxes and they are also being mandated to collect the arrears on the household charge," he said.
A widow with children said she would be losing €70 per month due to the new property tax and the €10 cut in child benefit. Mr Noonan said she would be able to defer the payment of the property tax because her income was under the €25,000 limit. He gave a similar response to a pensioner who had inherited a house worth €1.9m from his late mother and complained that he had paid inheritance tax of €276,000 on it.
Mr Noonan said he would have the option of deferring the property tax because the limits were based on income rather than the value of the house. And he said the two acres included with the house were not taken into account when calculating the property tax.
Mr Noonan defended the decision to raise the cost of PRSI contributions for self employed people from €253 per year to €500. He said there was a hole in the social insurance fund which pays welfare benefits that had to be filled – and that it would fund a state pension for the self employed when they retired.
“Anyone who can get a state pension for €500 per year is doing very well,” he said.
Public Expenditure Minister Brendan Howlin defended the cuts to the respite care grants which are used to pay for carers to get a short break from their duties.
A carer looking after her elderly mother with Parkinson’s Disease said he was taking advantage of the fact that they would never abandon the people they loved . She told him over the airwaves: “Shame on you”.
Mr Howlin said that core payments for carers had been protected, and that it was right and proper that €775m would be spent on carers next year for the fantastic work they did.
“You make a compelling case, but so do the elderly, so do children, so do people who depend on hospital services and people who want to have school places” he told the carer.
Earlier, Tanaiste Eamon Gilmore defended the Budget, saying it was the toughest the country will have to put up with but the vulnerable had to be protected.
Mr Gilmore said the Government knows it's "tough".
"We know it's tough. We know it's difficult. We know how it is impacting on people. We have done our best to ensure that it is fair.
"It does take us now where we can see the finishing line on these type of measures having to be introduced in the future," he said on RTE News.