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Monday 26 June 2017

Jobless and low paid will not be hit by property tax

Ailish O'Hora Public Affairs Correspondent

THE low paid and unemployed will be exempt from a controversial new property tax that could be introduced in the next Budget, the Irish Independent has learned.

People on low incomes, the jobless and those with disabilities, will not have to pay the tax under the plans being considered by the Government. Social and affordable houses and nursing homes are also set to be exempt.

"The Department of Finance decided in the last month that a self-assessment tax is the way to go because it can raise billions in revenues quickly and annually," a source confirmed.

If a property tax is implemented in the next Budget, it will be a self-assessment system as outlined in the Commission on Taxation report, which was presented to the Government last year. House valuation bands would be introduced to make assessment easier.

For example, the report suggested houses worth up to €150,000 would pay between €188 and €225 per annum, while those owning homes valued at more than €1.5m would have to pay over €3,000 a year.

Stamp duty could also be reduced in a bid to make the tax more palatable for the public.

Resistance

However, the Government will be closely monitoring the level of public resistance to the plan, which was revealed in the Irish Independent yesterday.

Disgruntled Fianna Fail backbenchers yesterday joined in the backlash against the tax.

Dublin South East TD Chris Andrews said the move could target those who are struggling to pay mortgages on properties which have fallen in value by more than 50pc in the past three years. "Given the current difficulties experienced by people in relation to mortgages, I would be strongly opposed to the implementation of any such tax," Mr Andrews said.

Taoiseach Brian Cowen yesterday refused to rule out the new property tax when quizzed in the Dail yesterday.

"This is a budgetary matter that will be decided at the time of the next Budget. No decisions have been taken on these matters," Mr Cowen said.

He would say only that the introduction of a property tax would mean "major structural change" to the taxation system and would need to take into account the total tax impact on individuals.

Fine Gael leader Enda Kenny claimed a property tax would be "punitive" and "grossly unfair".

Speaking in the Dail, he said that overlooked proposals in the An Bord Snip report would produce €1.8bn in savings and remove the need for a property tax. Fine Gael said that cutting public sector numbers by 10,000, merging and removing 43 quangos and outsourcing public services to the private sector would boost state coffers by €1.8bn.

Cuts

It is estimated that only 30 of the 271 recommendations in the report have been implemented, while another 90 have been partially implemented. The report contained €5.3bn worth of cuts.

It is understood that the property tax would be based on the size and value of a property. Homeowners liable for the tax could also be forced to pay to have their homes valued.

Despite opposition to the tax, the Government is under growing pressure to find quick and long-term ways to generate cash. It is borrowing more than €50m a day to balance the books and has already said it needs to cut spending by at least €3bn in Budget 2010.

Senior government advisers have estimated the move could raise between €1.5bn and €2bn a year.

Economists have also welcomed the move because it would enable the Government to raise cash for the Exchequer as soon as next year. "It would help fix the fiscal situation and scale back on ridiculous stamp duties," An Bord Snip Nua author Colm McCarthy told the Irish Independent.

A number of concerned householders contacted the Irish Independent yesterday. One of these, Terry O'Connor, an unemployed former SR Technics worker, said he would not be able to afford to pay the tax.

"If there are exemptions I would welcome it, but there are thousands of people who couldn't pay it," he said.

Irish Independent

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