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€4m windfall from second homes tax

CITY bosses have collected €4m more than expected from the second-home tax, helping to plug a budget hole.

Owners of investment and holiday homes in Dublin city have been scrambling to pay the €200 charge as the penalties for non-compliance are so tough, it has emerged.

Dublin City Council has taken in €15m in revenue from the levy this year -- some 36pc more than projections.

The extra cash has been the main reason for the local authority being able to balance its budget, Fine Gael's Ruairi McGinley told the Herald.

People are now complying with the tax -- officially called the Non-Principal Private Residence (NPPR) levy -- having "learnt to their cost" the high price of ignoring it, he said.

Along with revenue from the €100 Household Charge, the NPPR is the "main reason" the council is in credit in 2012, Mr McGinley said.

Property owners initially "thought they were going to get away" with not paying but soon discovered that was not the case, the Crumlin-based councillor believes.

If the tax is not paid within the required period, city and county councils around the country add €20 a month in penalties.

That would amount to €240 a year -- €40 more than the initial levy -- and in some cases has led to late payments of several hundred euro.

Mr McGinley described the extra cash as "the main bit of good news" for the council as it drew up its €800m budget.

But the NPPR has proved a burden on property owners who bought at the height of the boom and were already left with a huge second mortgage.

The council's major source of revenue -- income from commercial rates -- amounted to €280m.

In an effort to ease the burden on businesses, it reduced the rates by 0.5pc in this year's budget, bringing the overall reduction to 4.8pc in the past four years. The cut was made possible because the revenue from the levy held up in 2012.