Call for property tax to be based on size not value

Property tax should be based on the size of a property and not its value, contributors to a recent consultation on the future of the tax have argued.

In submissions to the Department of Finance, contributors also called for a credit for those who have paid stamp duty on a property in the 10 years prior to the introduction of the tax, as well as a reduction in the tax for apartment owners who have paid their management fee in full.

Earlier this year, the Department of Finance ran a consultation on the property tax, in conjunction with a review by Dr Don Thornhill. The consultation attracted about 40 submissions which have now been published in full on the Department's website.

Rathgar

The consultation was carried out before this year’s budget, in which Minister for Finance

Michael Noonan

said he would postpone the revaluation date for the property tax until 2019.

Previously, properties were due to be revalued in 2016 and a common theme in many of the submissions was a fear of the impact of a revaluation of the tax, which is levied at a rate of 0.18 per cent on the property’s value. Given the increase in property prices since the tax was introduced in 2013, particularly in Dublin, many feared an impending revaluation date would significantly increase the tax.

In its submission for example, the Rathgar Residents Association in Dublin 6 expressed concern about a market review arguing that "an area like Rathgar will experience an enormous hike in LPT [Local Property Tax], whereas many areas elsewhere will not face the equivalent increase". It suggested a single national site valuation system which is not based on market values.

The IPAV, the representative body for estate agents, agreed that the tax should not be based on value alone.

“There is more to property than its market value and includes such characteristics as site size, location, condition, property build size, whether the property is a new build or not and more” chief executive Pat Davitt said in its submission.

The Construction Industry Federation suggested that instead of a market value approach, the tax should be based on the number of habitable rooms per dwelling.

The Irish Property Owners Association argued the tax should be levied on everyone, "instead of forcing the cost of the services provided to tenants onto landlords".

If this isn’t possible, it then suggests that the tax needs to be 100 per cent tax-deductible.