Thursday 23 November 2017

Surveyors seek major property tax revamps

A property tax based on valuers' certificates, the zero-rating of stamp duty for two years and reductions in commercial property rates and development levies are proposed by the Society of Chartered Surveyors (SCS) in its pre-Budget submission.

The SCS says there is a "compelling need to widen the tax base following a lengthy period of over-reliance on stamp duty" as it would give a "sustainable and reliable source of income".

SCS proposes that the new tax would replace stamp duty for purchasers of principal private homes and a 10-year moratorium would be required for the transition period starting from the date that the stamp duty was originally paid.

It favours qualified valuer certification as the basis for assessing the owner's property tax liability.

While acknowledging that this would create an additional cost to the owners in the short term, tax relief could be given to assist in defraying the up-front cost.

SCS calls for a reduction in development levies in line with the significant reduction in costs being achieved throughout the economy. It cites examples of where local authority calculations for these levies are out of kilter with other costs in the economy.

For instance South Dublin County Council is proposing to increase development levies by 33.7pc to €111 per sqm for commercial properties and 8.43pc to €12,000 per apartment. Dublin City Council proposes to increase commercial development levies by 15.5pc to €127 per sqm and 16pc to €156.6 per sqm for apartments.

Instead SCS says levy changes should reflect changes in construction costs for infrastructural development and the latest tender price index shows tender prices fell by 29pc between their 2007 peak and the end of 2009.

It also proposes a review of local authority rates on commercial property as these have more than doubled as a portion of occupation costs over the past 24 months. It estimates that such rates previously accounted for 10-15pc of occupation costs as a percentage of rental value but have increased to 40-50pc whilst trading conditions have declined.

While acknowledging that some local authorities have made efforts to reduce rates, nevertheless SCS says these are not enough to rectify the problem. It calls for a range of reforms including allowing owners and occupiers to seek a revaluation where circumstances change.

Irish Independent

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