Imposing property tax will not be easy
Published 28/07/2011 | 05:00
FLESH is being placed on the bones of something widely considered politically impossible -- a property tax -- and it will be a messy business. The suggestions which emerged yesterday have the merit of simplicity -- insofar as a property tax can ever be simple. There will only be three or so rates of tax, with each falling on a wide range of property valuations, rather than a precise valuation of each property.
Right away one sees the political difficulties. There will be demands for the value of mortgages to be deducted, so that the tax is on net value. There will be complaints that similar houses in Galway and -- well, choose your own less-favoured area -- will be rated differently for tax. Whatever the low-income exemption, there will be arguments that it should be higher.
Much of this opposition comes from the fact that there has been no tax on Irish residences for more than three decades. Yet, given that over 80pc of Irish households own their home, trying to ward off property taxes may be cutting off the nose to spite the face. Loading it all on to existing taxes may cost them more in the end because it would do more damage to the economy.