OAPs and low-income families to get flat-rate €100 house tax
A FLAT rate property tax of as little as €100 for pensioners and low-income families is being considered by the Government, the Irish Independent has learned.
And the future of the €200 second home tax has to be decided upon, with the possibility it will be retained in some form when the property tax comes into effect.
The property tax is expected to be self-assessment and based on the market value of the house.
Homeowners will get the property tax for half price next year as it will come into effect towards the middle of the year.
Finance Minister Michael Noonan is dealing with the finalisation of the plans for the tax, which will be announced in the Budget.
Among the issues still to be resolved include:
- The rate and bands.
- The amount to be collected in 2013.
- The future of the second home tax.
- The relief for boomtime homebuyers.
- The payment by those on low incomes.
The Government is looking at bringing in a "minimum rate" for OAPs and those on social welfare.
Rather than paying the rate based upon the market value, these categories of homeowners would pay from as little as €100 up to perhaps €200.
The coalition is trying to keep the property tax as simple as possible, while also ensuring the system is fair.
But putting a means-testing element into the equation would prove to be extremely difficult.
Instead, an option is to bring in a minimum rate for specific categories of homeowners -- such as pensioners and those dependent on social welfare.
Ministers are concerned about being seen to hit low-income families with a high level of tax, in particular a person who was unemployed in recent years but bought a house based on their previous salary.
Placing a high tax on someone already in mortgage arrears and negative equity is regarded as not making much sense.
And there is also a fear of elderly people who still live in the large houses where they raised their families being subjected to punitive tax bills.
Government sources insist there is absolutely no decision made on the rate of the property tax to be applied.
The coalition is also veering away from a super property tax for owners of large, high-value homes, where a higher percentage rate of tax would apply.
But the owners of high-value houses pay more based on the value of the property. "If the value of their property is €10m, they will pay accordingly. The Bono in Dalkey will pay far more than the ordinary Billy in Tuam," a source said.
The future of the lucrative second home tax is also posing a problem. Second homeowners will have to pay the property tax on each house. But the Government is considering incorporating the second home tax into the property tax.
Meanwhile, it has also emerged the Government is looking at bringing in a tax on maternity benefit. The Revenue Commissioners are working on a model for applying the tax, which could raised up to €90m.
The Department of Finance said last night it was not going to comment on budget speculation.
Officials said the refusal to comment did not mean the proposal was being considered.