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Tuesday 24 April 2018

Call for income cut-off point in property levy

Mark Keenan

Mark Keenan

For the purposes of property tax, which kicks in next year, the owner of a Victorian six-bed semi at Palmerston Park, in Dublin 6, will end up paying at the full rate from 2014 at around €3,700 per annum (see table).

In contrast, the owner of Bellamont Forest at Cootehill, Co Cavan, will pay €800 less per annum at the full rate, even though Bellamont could hold the equivalent of 10 family homes within its walls. This is because Bellamont is worth less than Palmerston Park.

And the owner of a one bedroom apartment in Dublin will pay almost twice the tax of a detached, three-bedroom home three times its size in Co Waterford.

Robert Ganly, a former president of the IAVI and boss of Knight Frank, which is selling Bellamont, believes there needs to be a mitigating measure built into the new property tax to help those who live in expensive homes but earn little.

"It is vital that any property tax regime introduces an income threshold cut-off. Just because someone lives in a house worth €600,000 in Dublin, doesn't mean they're well off. We are seeing plenty of struggling city families with grown-up children living in such homes with everyone in the house unemployed except for one parent who is supporting them all," said Mr Ganly.

"There's no way some of these people would be able to pay €1,200."

Ronan O'Driscoll of Savills believes the tax will see a new game of cat and mouse evolving among homeowners and the Revenue Commissioners.

"Having been more used to talking up the values of their homes for years, many homeowners will now be trying to make their homes appear as if they're worth less," he said.

"Because the forthcoming tax will be based on self-assessment, I'd imagine we're going to see groups of homeowners getting together to try and agree prices between them in estates where homes are similar.

"I have to say that it will be far easier for those in rural areas to undervalue their homes and pay less property tax.

"This is because the tax man will be referring to the national property price register for valuations and in cities where there are lots of similar homes, it will be far easier to match like with like. In rural areas where all homes are not the same, it will be considerably easier to justify lower values."

Irish Independent

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