Owners face €250 tax on homes
Property levy will permanently replace €100 household service charge in 2014
THE average homeowner will pay €200 to €250 a year in property tax when the permanent scheme is introduced in three years' time, the Irish Independent has learned.
Owners of mansions will pay about €600 a year when the new property tax comes into effect.
The €100 household service charge, which will run for the next two years, will be the minimum faced by households when the property tax comes in.
The average three-bedroom, semi-detached home will cost €200 to €250 in property tax, under provisional plans being drawn up by the Government.
The value of the property and the income of the household will be the factors dictating how much has to be paid.
Using the value of the property as the first criteria will mean homeowners in Dublin and other cities are likely to be hit hardest.
The income of the household will also come into the equation with exemptions for those -- such as elderly people living in large houses -- who cannot pay.
Similar to the household service charge, there will also be waivers for those on low incomes.
The property tax will come into effect in 2014 and will be the permanent replacement for the €100 household service charge to come in next January.
The permanent property tax will be self-assessed, with a range of bands depending on the value of the house.
The Government is setting up a valuation system to assist homeowners in determining how much their home is worth.
Environment Minister Phil Hogan yesterday said the tax would be based on "property values as well as the income in the household".
He added: "The detail of that and where it's pitched at will be decided by the Government over the next 18 months."
And Mr Hogan defended the introduction of the household service charge, saying the Government had to broaden the tax base.
"I'm not saying this is fair. This is not ideal," he said on RTE Radio 1.
Mr Hogan said the previous Fianna Fail/Green coalition wanted to bring in a €200 tax.
Of the 1.8 million households in the country, more than 1.6 million will be paying the household service charge, with a waiver for about one-in-10 families on low incomes.
The household service charge will raise €160m a year, assuming all those who are supposed to pay do so.
The 250,000 households where exemptions will apply include:
•Properties that are not sold or rented out.
•Rented council houses, social housing, voluntary and co-operative housing.
•Properties owned by the Government, HSE or a charity.
•Properties where commercial rates are already being paid.
•Homes of elderly people who have moved into a nursing home.
•Homeowners who cannot make their repayments and are getting mortgage interest supplement.
•Homes in unfinished ghost estates.