Monday 23 October 2017

The wrong time to land property tax on families

By Deputy Michael Moynihan (FF), Cork North West

I FIRMLY believe this is not the time for the introduction of a residential property tax and the current Fine Gael / Labour government would be very unwise to proceed with the introduction of such a tax during the lifetime of this government.

As they read this, I can almost hear government TDs and supporters ask how a Fianna Fáil representative can say this, since it was Fianna Fáil and the Greens who agreed to introduce a property tax as part of the original Memorandum of Understanding negotiated with the Troika November 2010.

Yes, the previous government did commit to introducing a property tax, but I believe that the then government was wrong to commit to this back in 2010.

However wrong it was then, it would be even more foolhardy to proceed with the idea next year as this current government plans to do, and I will explain why.

Firstly, the troika have repeatedly made it clear that one budget measure can replace another of equal value. Their main concern is the achievement of the overall targets.

It is open to the government to negotiate with the troika to remove the property tax from the table. At no stage has any minister said that the government intends to do this.

If the government proceeds with the introduction of a property tax in 2013, it is because they have chosen to do so.

The bottom line is that hundreds of thousands of families and single people here in Cork and across the country simply do not have an ability to pay a property tax at this time. The money just isn't there.

Let's look at a few facts. We know that more than one in five residential mortgages in this region is in trouble. The number of mortgages in long term arrears is growing at an alarming rate.

How can you levy a new property tax on people who can't afford to make their mortgage repayments? I don't believe you can.

We know from a recent report by Davy Stockbrokers that more than half of all mortgages are in negative equity. How can you ask someone, for example, with a mortgage of €400,000 and a house worth €200,000 to pay a property tax? I don't believe you can.

My party has discovered through parliamentary questions that, over the past ten years, over 160,000 people paid stamp duty of €10,000 or more on the purchase of a residential property. How can you ask someone who paid stamp duty of €10,000 or more in recent years to pay a property tax? I don't believe you can.

There are several other important issues that point to the absurdity of introducing a property tax now; not least, the fact that we have 21,265 in Cork the live register; there are 7,318 unemployed in Mallow, Fermoy and Newmarket alone.

And finally, a recent report by the Irish League of Credit Unions has informed us that almost half of people struggle to pay their bills on time.