Forget property levy, rising car tax is braking the bank
CONTROVERSY over the Local Property Tax rumbles on as thousands of people are annoyed about having to pay it in the first place. It has become a huge political hot potato. The tax will take in €500m next year.
Contrast that with the ever-increasing taxes placed on motorists, who just quietly sign up and pay them every day of the week. Motor tax rates have shot up in the past four years. The previous government suckered in car buyers in 2008 with lower taxes on new cars, but they have been royally hiked since then. Some rates went up 25 per cent this year.
Motorists pay just over €1bn per year in motor tax — double the property tax take. On the fuel side the State is now taking almost 60 per cent of the pump price of a litre of petrol through taxes such as carbon tax, NORA levy, VAT and excise.
A car that travels 12,000 miles per year at a fuel rate of 30 miles to the gallon, will use 150 litres per month. The motorist pays €240 per month for fuel and €131 goes on tax. That means they are paying €1,572 in fuel taxes per year, plus another €710, for example, on a pre-2008 2-litre engine car — a total of €2,282 in tax.
This is a multiple of the average property tax charge and it excludes the tax take on NCT tests and VAT on tyres, car parts and servicing.
The taxman is digging a lot deeper into our pockets in relation to our cars than our homes. We just haven’t noticed it yet.