independent

Monday 21 April 2014

TDs furious that property tax won't be spent locally

COALITION backbenchers are furious after learning that high property tax rates paid by city dwellers will be used to pay for services for homeowners in rural areas.

The so-called "local" property tax contains no guarantee that money paid by home owners in an area will be spent locally.

Coalition TDs from the capital are outraged that their constituents will be paying property taxes which are at least double those in rural areas – only to see it redistributed around the country.

All the property taxes paid will go into a central pot, rather than being guaranteed to go to the respective areas.

City homeowners will cough up almost half of the property tax take in 2014, despite accounting for just over one third of the number of households in the country, an analysis by the Irish Independent reveals.

The "Local Property Tax" bill which is being debated in the Dail tomorrow threatens to re-open the urban-rural divide, with Dublin TDs in wealthy constituencies already getting complaints from constituents who will be paying property taxes of €1,000-plus.

Dublin's 466,461 households, which comprise 28.2pc of the country's total number, will pay €188.9m in 2014.

This equates to 39pc of the €483.1m projected national property tax take in the course of the full year.

By our calculations, Cork city households (47,110) will pay in the order of €14.8m, Galway city households will pay €8.7m, Limerick city will shell out €7.8m and Waterford city citizens will spend €4m on the property tax.

The Thornhill expert report on the property tax had recommended that councils should get to keep 65pc, with the rest redistributed to councils "with weaker funding bases".

But Fine Gael Dublin South TD Olivia Mitchell complained that the property tax revenue would be going into a "big pot" and then redistributed to councils around the county.

Overall, Dublin city dwellers are likely to pay an average property tax rate of €405, compared with their rural counterparts, who will pay an average of €249.

The final decision will be made by Finance Minister Michael Noonan's department.

The Department of Finance has declined to give any commitment about how much property tax revenue can be kept by individual local authorities. It said there was no detail on when this decision will be made.

However, it has said that 100pc of property tax revenue will be provided for local services such as parks, libraries, fire brigades and street-cleaning rather than used for general state spending.

Householders are due to get their information letter from the Revenue in just three months' time about paying the first instalment of the property tax, which will come into force on July 1 next year.

Irish Independent

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