ALTHOUGH the Household Charge of €100 was introduced last January, Budget 2013 is expected to unveil its successor, which is likely to be determined on the value of a person's house rather than the universal flat rate of €100 currently in place.
The Property Tax is expected to be up and running in July 2013, and is expected to be a self-assessment based system.
Under such a system each home owner will probably be expected to declare the value of his home – which will involve choosing a 'valuation band'.
Each band will be charged a different amount of property tax.
A Property Tax expert group was set up to recommend an appropriate system of property tax.
This expert group reported back to Minister for the Environment and Local Government in the summer of 2012 – but the contents of the report have not yet been made public. All that is known is that Revenue will be responsible for the collection of the property tax.
The Commission on Taxation produced a report on property tax back in 2009 – and its suggestions might form the basis of any property tax system. The Commission's report made a number of suggestions including a tiered property tax – based on the value of the house; property Tax to be charged on vacant and occupied properties and waivers for people on lower incomes
The amounts of Property Tax suggested in that report were as follows:
Valued Under €150,000 – Tax Amount in the range €188 to €225 a year; Valued between €150k to €300k – Property Tax between€563 and €675 a year; Valued between €300k and €450k – Property Tax between €938 and €1,125 a year; Valued between €450k and €600k – Property Tax between €1,313 and €1,575 a year; Valued between €600k and €750k – Property Tax between €1,688 and €2,025 a year; Valued between €750k and €1m – Property Tax between €2,188 and €2,625 a year; Valued between €1m and €1.5m – Property Tax between €3,125 and €3,750 a year; Valued Over €1.5m – tax based on between 0.25 per cent and 0.3 per cent of the value.
It was estimated that about €1 billion a year could be raised by a property tax in Ireland with the rates shown above.
A report about property tax by the ESRI in 2010 recommended an even higher level of tax of 0.4 per cent.
The IMF suggested a rate of 0.5 per cent – which if implemented would mean a property tax of €1,125 a year for a house valued at €225,000. However, Finance Minister Michael Noonan has said that Ireland won't be charging 0.5 per cent property tax.