Monday 19 February 2018

Troika agrees property-tax reprieve for poor and elderly

Fionnan Sheahan Political Editor

THE troika has given the green light to measures that will allow the elderly and low-income households to escape the brunt of the property tax.

However, the EU-IMF bailout team is adamant that the new tax will have to come into effect next year. "They don't believe there is any alternative," a source said.

But the Government is considering a flat-rate charge of €100 for pensioners and low-income families, the Irish Independent understands.

The full property tax is expected to be self-assessed and based upon market values.

Finance Minister Michael Noonan is dealing with the finalisation of the plans for the tax, which will be announced in the Budget.

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 would be badly affected. Placing a high tax on someone already in mortgage arrears is not seen as making much sense.

And there are also fears about elderly people who still live in the large houses where they raised their families being subjected to punitive tax bills.

The IMF-EU team reviewing the bailout has indicated it does not believe the full rate should apply to everyone.

Welfare

"They seem to accept there would be problems with a strong property tax without taking into account the ability to pay. You can't just bring it in without looking at that," a source said.

"An example would be a family where the couple have both lost their jobs or an elderly person still living in a big house where they reared their family, but now with no other income apart from the pension."

The Government is now looking at possibly bringing in a "minimum rate" between €100 and €200 for OAPs and those on social welfare.

The bailout team is also supportive of the Government's efforts to get the banks lending.

The IMF side, in particular, appears to be well aware of the low level of lending to small business and the amount of actual drawdown of loans.

Department of Finance secretary-general John Moran and a Central Bank official were highly critical of the banks' approach to the mortgage crisis and lending this week.

A source pointed out that Mr Moran would not have made his comments at a time "when the troika were in town" without talking to them in advance and "knowing their views".

Irish Independent

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