Faithful departed do death duty with grave tax
Published 05/04/2010 | 05:00
THE taxman is going to follow us to the grave by imposing VAT on burials in council cemeteries.
The "grave tax" is another previously unknown consequence of a European Court of Justice ruling, which is forcing local authorities to apply VAT to a range of services, including waste collection.
The new tax of 13.5pc will push up the cost of acquiring a grave in a local authority cemetery from July 1.
It may add us much as €172 to the cost of the cheapest grave offered by Cork City Council (currently €1,275) and up to €2,160 to the cost of a four- grave plot in Deansgrange cemetery (currently €16,000), which is managed by Dun Laoghaire-Rathdown County Council.
This will bring in more revenue to the cash-strapped Exchequer -- and will add a further dimension to the saying: "In this world nothing can be said to be certain, except death and taxes."
However, consumers may be able to avoid the tax by buying their graves before July 1.
Fine Gael Dublin South East TD Lucinda Creighton said she had been contacted about the impending tax by undertakers who were concerned about the impact the tax would have on grave prices.
"They don't see themselves as being in a position to absorb the cost because they are running to a tight margin and it's the consumer who would be hit with the cost," she said.
Many local authorities own and operate cemeteries, although prices for plots vary. Galway City Council administers two graveyards, Mount St James and the New Cemetery, with a single grave costing €650. Waterford County Council charges €650 for a plot in its cemeteries, while Limerick City Council charges €2,000 for a plot in the Mount St Lawrence cemetery.
These plots have previously been exempt from VAT -- although graves in private cemeteries are charged the full 13.5pc VAT rate.
Cremations are already taxed at 13.5pc VAT, so the EU ruling will not affect the current price.
Ms Creighton said it was important that graves in local cemeteries got some form of an exemption under the EU ruling -- which was designed to bring in fairer competition between public and private services.
"People don't have a choice about it if somebody passes away. It's a necessary cost. And I think it would be very unfortunate for people had to bear a significantly increased cost," she said.
In response to her parliamentary question, Finance Minister Brian Lenihan confirmed that local authority cemeteries would become subject to VAT from July 1 after the passage of the 2010 Finance Bill.
However, he indicated that he did not want them to pass on the full 13.5pc cost to people paying for graves.
"Since the local authorities will have an entitlement to recover from Revenue the VAT incurred on their input costs in providing the service, the degree to which the VAT is passed on should be less than the full VAT rate of 13.5pc. I will be urging local authorities to take this into account," he said.