Revealed: Plans for higher property tax of up to €600
ENVIRONMENT Minister Phil Hogan last night set out the ground rules to create a full-blown property tax, which will cost many households substantially more than the controversial €100 charge.
Even as controversy rages over the new €100 charge, experts are to start working out within weeks what homeowners will pay when the permanent property tax is introduced in 2014.
Mr Hogan told the Irish Independent that the key elements for the tax would be:
- The value of the property
- Household income
- Regional differences between property values
- Payment of stamp duty by first-time buyers during the property boom
Waivers for council tenants and those getting state help to pay their mortgage.
The group of experts will have to work out a formula for how the property tax will be applied.
Mr Hogan said he could not begin to put a price on the tax until the experts have completed their work next summer.
However, there has already been speculation the average homeowner will end up paying between €200 and €250 a year, with owners of mansions paying about €600 a year.
The minister's decision to press on with plans to develop the property tax for 2014 comes as controversy rages over the €100 household charge.
Mr Hogan said he also expected that the new €100 charge would flush out owners of second homes who have been evading the existing €200 tax on second properties.
He called on the TDs currently encouraging people to boycott the tax to "resign their seats in the Dail", adding: "It flies in the face of democracy. They should consider their positions as democratically elected representatives if they are encouraging people to break the law passed by the national parliament."
Nine rebel TDs yesterday pledged not to pay the charge and said they would stand by those who boycott the tax.
Mr Hogan reserved special mention for Socialist Party TD Joe Higgins, commenting: "It's a remarkable state of affairs when the people against property taxes are socialists."
Mr Higgins said he was opposed to any property tax on the family home, even a site-valuation tax where the amount of tax to be paid rises with the value of the house. Instead, he wanted to see a wealth tax being applied to rich people.
The Dublin West TD is calling on householders to refuse to pay the new €100 tax and not to register their house for the charge.
The Government has warned that failing to pay the tax will result in penalties and could end up in a court appearance and fine of €2,500.
Mr Hogan said the new €100 will also catch out anyone dodging the €200 second-home tax because it will mean every house in the country will have to be registered.
Anybody who registers more than one will have to pay €100 for their home and then €300 for any subsequent property.
He indicated if a second property owner failed to pay the non-principal private residence tax since it was brought in three years ago, they would also be hit with back payments.
"This has the potential to identify any outstanding applicants for the second home charge because all properties will have to be registered.
"People took decisions on the basis of the law outlined in 2009 and they will have to deal with the consequences," he said.
The late-payment fees for the second homes at €20 a month are heavier than for the household charge.
For example, if no payment is made for five years, five separate €200 charges will be applied and will each attract a late payment fee of €20 per month.
The amount due after the five years will be about €4,500 of which amount €3,500 will be late-payment fees. And the property owner is liable to prosecution by the local authority to whom the payment is due with a maximum fine of €2,000, which is due to rise to €2,500.
The minister defended a provision in the legislation that will see the homeowners chased to the grave for the new €100 household charge.
A clause in the legislation deals with cases where someone who is the sole owner of a home dies with the household charge unpaid.
Mr Hogan rejected suggestions the unpaid charges be struck off upon death.
He said it would be unfair to homeowners who pay the charge.
The solution the minister came up with was to stop the clock on the penalties and interest building up once the homeowner dies -- provided the person who takes on the estate pays the outstanding bill.