Letter plan to target household tax dodgers
HOMEOWNERS who have not paid the €100 household charge will start receiving personal letters in the coming weeks telling them to pay up.
Environment Minister Phil Hogan is targeting the 650,000 householders who have not paid after shelving the difficult issue during the EU referendum campaign.
The first batch of letters will be aimed at landlords and second homeowners, and councils are being told to use their own local knowledge to target the tax evaders.
In these cases, councils will be expected to identify areas where there is a low level of payment and hit the property owners with reminder letters.
Later in the summer, local authorities will use the ESB’s database of properties to identify the remaining householders who have failed to pay.
The letters will tell homeowners of their obligation to pay €100, the fines they have already built up, and the further penalties that will accrue if they still don’t pay.
Anybody who has not paid already owes at least €110 and the sum increases the longer it goes unpaid.
The Government believes the letters will spark a response similar to the experience with TV licence fee defaulters – when they see they have been identified large numbers pay up.
For TV licences, two out of five people who received a letter paid up immediately.
Just under 950,000 homes have paid up for the household charge, but the remaining 650,000 have not paid.
The Coalition is also planning to take high-profile sample court cases against household charge dodgers across the country before the end of the year.
The letters will start going out from the third week in June.
"The local authorities will be writing to people. All the protocols are now in place," a government source said last night.
The letters will be sent out by councils under the supervision of the state agency in charge of collecting the €100 tax, the Local Government Management Agency.
After keeping a low profile during the referendum campaign, Environment Minister Phil Hogan will play a prominent role for the coming period.
Over the summer months, the Coalition will also start up the septic-tank registration scheme and take steps to bring in the new property tax.
The septic-tank scheme is currently being tested and registration will begin in July, with an online and postal method.
Once registration starts, homeowners with septic tanks will have three months to register and avail of the special discounted rate of €5.
After that, the special offer ends and the remaining septic-tank owners will be liable for a €50 fee.
Meanwhile, homeowners will face the full brunt of the property tax next year as the Government is forced to fast-track the rollout of the permanent system.
The property tax will be higher for many householders than the €100 household charge.
Ministers are keen to get away from the flat-rate charge where the €100 tax is the same for all.
The new system is expected to be self-assessed and will result in the owner of a regular three-bed semi-detached home paying €200 to €300 a year.
Government sources say the property tax is expected to be in the form of a 'site valuation tax', which assesses the value of the site itself and ignores the value of the house built on it.
As the tax is on the raw value of the site, it takes account of the location more than the physical bricks and mortar of the house itself.
So two houses side-by-side -- one rundown and one modern -- on the same size site, would be levied the same amount of property tax.
An expert group is due to report back before the summer with a formula for applying the property tax.
In order to introduce it in time for next year, the Government will have to make decisions and announce the system by the autumn.
The key elements of the equation to be considered for the site valuation property tax will be the:
- Value of the property.
- Regional differences between property values.
- Methods of payment.
- Help for low-income households.
- Alleviation for those who paid high stamp duty or first-time buyers during the property boom.
- Waivers to apply for council tenants.
- Assistance for those getting state help to pay their mortgage.
The expert group also has to work out how to audit the system to ensure householders are paying the right amount and how to enforce the system with penalties for failing to pay.
The expert group on the property tax is chaired by consultant and former top civil servant, Dr Don Thornhill.