THE gross inequity of Finance Minister Michael Noonan's property tax is today laid bare as it has emerged Dubliners on the lowest rung of the property ladder will pay higher property tax than the owners of large four-bedroom homes across rural Ireland.
One-bed apartment owners in the golden triangle of south county Dublin will be forced to pay on average €315 in property tax, higher or equal than that paid by the owners of large detached houses in 19 other counties outside the capital, a Sunday Independent national property survey published today reveals.
The figures have reignited angry calls this weekend from within Fine Gael to have the terms and scope of the property tax amended in the Finance Bill to address the "injustice inflicted on the people of Dublin".
Dublin South TD Olivia Mitchell said: "What is happening is that many young people who bought apartments at the peak, paid huge stamp duty and are now caught in negative equity will be subsidising those in country mansions. It is grossly unfair," she said.
According to our county-by-county analysis, owners of large homes in counties Mayo, Roscommon, Leitrim, Cavan, Longford, Westmeath, Offaly, Laois and Wexford will pay, on average, lower property tax than owners of the smallest apartments and houses in areas such as Stillorgan, Dalkey and Blackrock.
For example, owners of large four and five-bed houses in Taoiseach Enda Kenny's constituency of Mayo will pay a mere €225 a year in property tax, while people in the same-sized house in south Dublin will be forced to pay €945, a difference of €720 a year, our survey says.
But worse still, those who own large rural homes who will pay the €225 property tax will be charged €90 less than owners of small one-bedroom apartments or houses in south Dublin. While the figures contained in the survey are based on averages, the reality is that the owners of larger homes in Dublin will pay in excess of €1,000 every year in property tax.
In counties Kerry, Galway, Donegal, Monaghan, Limerick, Waterford, Tipperary, Sligo, Longford, Louth, Kilkenny, Meath and Carlow, owners of the largest properties will pay on average €315, the same as the one-bed apartment owners in south Dublin.
The survey examined the latest available sales data based on actual sales figures drawn from the Residential Property Price Register as well as information contained in quarterly reports on the property market by Daft.ie and MyHome.ie.
Reacting to the findings of our survey, angry Dublin Fine Gael TDs have reiterated their claims that what is being introduced is not a property tax but merely another form of income tax.
Dublin South TD Olivia Mitchell said: "We all know this so-called property tax is not a sustainable model for collecting money. These figures demonstrate clearly that the property tax is massively unfair."
She added: "I know the rural people have said they don't have the same services, and their subvention should come out from general taxation. This is not a property tax and the people of Dublin are being done a grave injustice."
Her colleague Eoghan Murphy, who represents the Dublin South East constituency, branded the property tax as a "deeply retrograde measure".
"This can in no way be perceived as fair, no way. It doesn't make any sense. I am all for a local services tax or charge, but this is just another form of income tax," he added.
"If this is going ahead, we must make allowance for those who paid stamp duty at the peak, but we must see exactly to what degree Dublin taxpayers will be subsidising those down the country."
Dun Laoghaire TD Mary Mitchell O'Connor said her major concern about the tax was for those who paid stamp duty at 9 per cent who would be burdened by this new tax.
She said: "This proposed tax takes account of people's ability to pay through a series of deferral arrangements but it does not take account of those who paid stamp duty of up to 9 per cent at the top end of the market. Many of those buyers had to borrow the money to pay that stamp duty. It would be galling if other counties did not pay and expected Dun Laoghaire residents to subsidise them."
Peter Mathews TD said many people in south Dublin simply won't be able to pay the tax or would have to sacrifice "dental work" for their children.
"I can see that there's going to be for those people who would in theory like to pay it, an inability to pay it. If you have a €650 after-tax bill on a modest enough house in south Dublin, that's a lot of money. Sure they're giving up things that they would have considered worth fighting for, things like dental correction work for children; all those things are being cut out," he said.
He added that owners of one-bed apartments in Dublin were far more likely to have borrowed heavily than owners of four-bed detached houses outside Dublin.
"You might find also that the income-generation capacity of the one-bed apartment owner is far more volatile than the owners of the four-bed house," he said.
In March, homeowners will receive correspondence from Revenue as to the amount of property tax they will have to pay when the tax comes into force in July. This year homeowners will only be liable for half of the full charge. The full tax will be levied from January 1, 2014.