| 16.9°C Dublin

New hope on property tax after pressure forces rethink

HOUSE extensions or refurbishments which add value to a home will not lead to immediate increases in the property tax, it has emerged.

The Government is understood to be considering allowing owners to fix the worth of their property for three years.

The Fine Gael/Labour Coalition will next week announce a value-based property tax as part of the Budget, expected to be levied at a rate of 0.2pc.

A family whose house is worth €300,000 would be hit with a bill of €600 a year.

The tax is due to be introduced in July 2013, replacing the Household Charge.

But concerns had been raised that an owner who has built an extension would have to pay a higher amount, as the value of the home would have increased.

This may deter householders from undertaking renovations and further dampen an already depressed construction industry.

As a result, the Government is considering allowing a three-year fixed period within which the value would remain the same.

It means a householder who sets the value of their home at €200,000 in July next year would not have to revisit the issue until July 2016.

Families are bracing themselves for a raft of measures that will leave them less well off.

A €10 cut to child benefit is expected to be announced, with the rate falling from €140 to €130, saving the Exchequer €138m in a full year.


Changes to the over-70s medical card, as well as TV licence, electricity and telephone allowances for OAPs, are also being reviewed.

Transport Minister Leo Varadkar said an increase in carbon tax, which is levied on fuel, is likely, saying "any increase in taxation is going to be used to reduce the deficit".

Motor tax hikes are also being considered.

The Cabinet was meeting for a third time today to finalise the budgetary measures.

Fianna Fail spokesman on social protection, Willie O'Dea, said a reduction in child benefit would be a "further attack on families with children".


He added: "Currently in Ireland there are 250,000 children living in families that are below the poverty line -- we should be trying to protect families, not target them.

"Let's not forget that the full impact of the 2012 cuts to child benefit will only come into effect in January. Assuming the new cut will be for the first two children, a family with four children will now find themselves down €1,008 a year (€240 this year and €768 from last year's cuts) compared to 2011."

Sinn Fein health spokesman Caoimhghin O Caolain said any cut in child benefit would be a "blatant breach of election pledges from the Labour Party".

It is also expected medical card holders face a doubling of the 50 cent prescription charges

People living in council houses are facing higher rents -- with rises of €1 or €2 a week.