Property tax overhaul to hit home owners next year
ENIVORONMENT Minister Phil Hogan today flagged a radical change in property taxation – to replace the new household charge – for next year.
Mr Hogan said the Government has set up an inter-departmental group to examine how such a system can be drawn up.
Minister Hogan added that the tax will be based on a ‘‘homeowner's ability to pay and the size of their property’’.
He said: "We have set up an inter-departmental group in order to look at how we can have a fairer, more progressive property tax regime in 2013, 2014.
"We realise that the household charge is a flat tax, it is not progressive, but it is an interim measure. In line with what we have agreed with the EU/IMF.’’
According to reports today, the €100 a year household charge - imposed in this month’s Budget - is likely to be replaced by a comprehensive, graduated tax, based on the size or value of a house.
Under the terms of the EU-IMF deal such a system of property tax is due to be put in place in 2014.
But the Government has taken a decision to speed up the process.
An expert group - which will be chaired by a representative of the Revenue Commissioners - is due to report back to Minister Phil Hogan by next April..
The Commission on Taxation, which reported in 2009 had recommended radical changes. It suggested:
- A charge of €188 would be paid on houses valued at up to €150,000.
- €563 on houses between €150,000 and €300,000.
- €938 on houses up to €450,000.
- €1,313 on houses valued at up to €600,000.
- €1,699 on houses up to €750,000.
- €2,188 on houses valued at up to €1 million.
- €3,125 on houses up to €1.5 million and 0.25 per cent of the valuation on houses over that.
But it is unlikely that the scheme to be adopted by the Government will be as draconian and severe as that proposed by the Commission two years ago, as water charges are also due to come into operation later in 2014.