Thursday 24 October 2019

Olivia Buckley: 'Government is distressing overstretched homeowners with silence on property tax'

Money men: Britain’s chancellor of the exchequer Philip Hammond welcomed Finance Minister Paschal Donohoe to 11 Downing Street yesterday ahead of St Patrick’s Day.
Money men: Britain’s chancellor of the exchequer Philip Hammond welcomed Finance Minister Paschal Donohoe to 11 Downing Street yesterday ahead of St Patrick’s Day.

Olivia Buckley

Another week and another period of uncertainty for thousands of homeowners, especially older people, when it comes to property tax. No details and no clarity are on offer. The Government, instead of offering certainty and publishing the long overdue review of the local property tax, is providing vague promises and talk. There are utterances that the vast majority won't be affected by increases, so who are they? There's talk of no dramatic increase in the tax. But what's not dramatic financially for one person is a genuine hardship for another. And we well know it.

Questions remain among homeowners about the local property tax and once and for all, they deserve an answer.

There has been an inexplicable delay in completing the property tax review and establishing proposals around the future of the tax itself. The Government itself does not appreciate the uncertainty that has been imposed on them by Brexit, and rightly so. However, they have no qualms when it comes to imposing uncertainty on Irish taxpayers, particularly our older people.

It is no wonder that homeowners are concerned about property tax. House values in some areas like my own in Dundrum, Dublin, have gone up, while the income of the people in the homes, especially of pensioners, have not gone up at all or only by very little. In my area, since the property tax came in, some homes have jumped three and six valuation bands. Those affected don't know whether to pre-empt a rise by making cutbacks now to their household budget or to plough ahead as is, but then face a costly bill.

The sharp jump in house prices is a factor of serious weakness in housing policy and action on housing, the main one being supply. House prices are rocketing in some areas only because no new houses are being built or new homes aren't coming on stream fast enough. In some areas of Dublin, house prices have doubled since 2012.

The Thornhill Review of local property tax in 2015 acknowledged the concern about the impact on potential property tax liabilities caused by significant property price developments.

Lack of supply and the bubbles it is causing in the market isn't a reason to punish homeowners who haven't any interest in selling or in fact who cannot afford to sell for the same reason as under-supply - rocketing inheritance issues due to prices, again driven by the lack of building.

The volatility in valuations is deeply unfair on Dublin homeowners, with tax bills four times higher in parts of Dublin than in more rural parts of the country, also with active local authority services.

Homeowners in Dundrum/Rathdown pay an average of €524, while the average in Donegal was €160 and in Leitrim €130. The owner of a small apartment in Dublin will pay significantly more property tax than the owner of a large house in rural Ireland. For older people, this is just a quirk of fate and takes no account of the fact that Dublin is a more expensive place to live outside of property taxes, even though people may be living on the same pension amounts. They and many others cannot afford to pay more. In the period when house prices have gone up by 80pc, pensions have gone up by just 8pc.

The market price of a house is an illusion unless one decides to sell. In my area, people want to stay in their homes so the market prices being taken by investors mean little. It is unfair to punish hard-working people on the back of a pressurised property market, especially the many older people who worked hard, very hard over the decades to pay for education, childcare, medical bills, commuting and living, all of which are more expensive in Dublin.

The fact is: people's homes are their homes. And some people want to stay in them if they can. They don't want to be pressured into downsizing, especially when options and choices in their community have not yet been thought through or are simply not available to them. Older people need and deserve security, familiarity, accessible services, a good community and a solid neighbourhood. Their home, and the ease of living there without financial stress or uncertainty, is central to their health and their well-being.

They are the very last group of people who deserve to be left in the dark about future financial liabilities.

Urgent clarity needs to be given to the property tax issue that is troubling many that I meet in Dublin. People deserve to know where they stand before any elections come - it cannot keep being kicked down the road. Older people are understandably anxious, and this issue of property taxes shouldn't be kicked around endlessly by the Government like a political football. The review of the property tax should be published without further delay.

Olivia Buckley is a Fianna Fáil local election candidate for the Dundrum area in Dublin

Irish Independent

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