Fine Gael faces property tax revolt by Dublin TDs
FURIOUS deputies resent unequal burden on the capital's residents
The Coalition is facing a revolt from furious Dublin Fine Gael TDs who are "bitterly" opposed to Finance Minister Michael Noonan's property tax, the Sunday Independent has learned.
In an unprecedented revolt against their own senior party colleague, the angry TDs have claimed that what is being introduced as a property tax is a "smash and grab" attempt to raise revenue quickly.
It has emerged that a meeting of the Dublin TDs is being arranged for when the Dail returns, in a bid to have Mr Noonan substantially alter the structure of the tax before payments begin in July.
According to party sources, concern is mounting in the ranks of Dublin TDs about the nature of the tax. They include a number of senior ministers, Transport Minister Leo Varadkar among them.
TDs, speaking publicly and privately, have said they are to "lobby hard" in the coming weeks for Mr Noonan to amend the tax structure.
Speaking to the Sunday Independent, Dublin South TD Olivia Mitchell strongly dismissed Mr Noonan's claim that it is a local property tax.
"This is not a property tax. This is nothing more than a revenue-raising exercise, let's be clear about this. They needed €500m and this is how they have done it," she said.
Ms Mitchell continued: "I bitterly resent having to pay this because we are paying for the rest of the country. We do it already in terms of income tax, where Dublin subsidises the rest and here is another tax doing the same."
Dublin South East TD Eoghan Murphy said the tax is "grossly unfair" and called on Mr Noonan to take the few months between now and when the tax is introduced to make it fairer.
Mr Murphy said: "I do not believe we should now be trying to implement a fiscal transfer from urban areas to rural areas through a national property tax, as it undermines what is already being achieved through income taxes. I believe it to be a danger to social cohesion and I believe it to be grossly unfair."
He added: "It is grossly unfair to people living in Dublin, who may be paying much more than people living outside of the capital, for a far smaller property. And I believe this applies to the lower levy itself also and not just the mansion tax."
Mr Murphy also criticised what he called the "pro-cyclical" nature of the tax, which he said got the country in trouble during the boom, given the reliance on stamp duties.
Of most concern to the TDs is the lack of concession for those people who bought their house at the height of the boom and paid stamp duty, as well as the lack of deferral options for those who find themselves unable to pay.
Dun Laoghaire TD Mary Mitchell O'Connor said: "Many of the residents in these houses have the appearance of being asset rich but many are cash poor. This proposed tax does not take account of those who paid stamp duty of up to 9 per cent at the top end of the market. Many of those buyers had to borrow the money to pay that stamp duty. Many now are in negative equity or are in mortgage arrears."
Despite their opposition, none of the TDs voted against the bill before Christmas. Explaining her decision, Ms Mitchell said: "I and others feel it is better to bide our time on this. Come July, I will have all of Dublin behind me so it is better to stay in where you can have some influence."
Other Dublin Fine Gael TDs also raised substantial objections to the tax, but were unwilling to speak on the record. "This is going to be a red rag to a bull to Dublin people, who are stretched beyond belief already. I don't hold any hope of Noonan shifting, he is implacable," said one TD.
A number of Labour TDs are also known to be very unhappy with the tax. Dublin Mid West TD Robert Dowds is known to have spoken out against it at Parliamentary Labour Party meetings in the run-up to the Budget, demanding there be equity between rural and urban, saying it "must be affordable".
Responding to the concern within his own party, junior finance minister Brian Hayes played down the significance of the disquiet, saying "they all voted for it". Speaking to the Sunday Independent, he said: "The vast majority of the tax will be ring-fenced for local services. It was this or hike up income tax and nobody wanted that."