Whoa…property tax sure is a contentious issue
When I wrote about the challenges the Government face in terms of applying a value-based property tax fairly before 2014 in my last blog I was expecting a reaction but not the level of vitriol towards the tax or the whiff of revolution.
My previous blog about a protester interrupting a mass property auction and warning people about the ” ill will” they could be buying along with a distressed property elicited mainly jokey responses – with quite a few zoning in on the fact that I’d made certain sweeping generalisations about grey-haired men at auctions. But on the subject of property tax or should I say the “P” word – few were in the mood for jokes. The comments ranged from the concerned to the outraged to alarming amphibian analogies.
A reader called Kuhn posted:
“Take a pot, boil the water.
Take a frog, throw him into the pot of boiling water, he jumps right out.
Take a pot of cold water, put the frog in the water and turn on the stove.
The frog will sit and be slowly boiled to death.
THIS IS WHAT THE GOVERNMENT IS DOING TO YOU ALL.”
I’m guessing Taoiseach Enda Kenny might deny that the frog in cold water conspiracy theory has any basis in truth but some feel the household charge is a softly softly introduction to a more punitive property tax . He has defended the €100 household charge to be introduced in January, arguing that the money being raised was vital to fund public services. In an Irish Times report yesterday he said it would help pay for “fire services and libraries and street cleaning” and added, “these things are all funded by the exchequer up until now and it’s necessary that citizens understand that they can make a contribution of €2 per week.”
From the comments I received it seems that many people are afraid of what is coming down the tracks, they already feel they are making enough of a financial contribution and not everyone is convinced that the money will go to fund these services. David said: “The EU/IMF dont really care where we get the money from as long as we get it. A tax on your house is an immoral tax especially when significant stamp tax has already been paid.” Another reader J Mac who lived in the US said: “Look, when I was in states, property taxes started out about $500 a year in our neighbourhood, then increased every second year to where they are averaging $10k a year now.They said it is to keep the services good, but 90% of it goes into the black hole of politician-made debt. When people cannot pay, after 3 years the property may be legally seized by the county and sold off to settle the debt. Now if they owed 30k for 3 years with fines and late payments added in this could go to 100k.”
Some of the people commenting were outraged investors who feel overburdened with taxes and registration fees ( click here see Fiona Reddan’s piece today about landlords feeling under siege) and others were advocating mass non-payment . But if stamp duty revenue has all but dried up, what is the alternative to the value-based property tax? Four readers put forward alternative scenarios . Peter reckoned the only viable system is one which will have a ceiling limited to a fixed proportion of the household income “irrespective of the value or size of the house.I would posit 0.15% of the valuation but no-one having to pay more than 2% of adjusted household income. Adjusted household income being the total household income, less the rent or mortgage. For eg a pensioner couple living in a €300K house this would be €88 rather than €450.However, I fear the enonomists would see this as inefficient.” Edel and Mary suggested introducing a council tax whereby the tenant pays the tax in a rental property while Laura asked “Why are the Government ignoring the much simpler option to tax based on size in square meters. No one really knows the value of property any more.”
Anyone else got any ideas?