125,000 council tenants face rent rises
More than 125,000 local authority tenants face rent increases as councils look set to pass on the property tax.
Almost all dwellings in the State are liable for the new tax, due to be collected on July 1st, including council houses and flats. According to the Finance (Local Property Tax) Act, enacted on December 26th, local authorities will have to pay the tax on their housing stock to the Revenue Commissioners.
Councils with larger housing stocks will have larger bills, and concerns have been raised that dwellings in urban councils will be liable for higher taxes than those in rural areas.
Chairman of the finance committee for Dublin City Council, Cllr Mícheál Mac Donncha (Sinn Féin), said he was “very concerned this will lead to rent increases”.
Cllr Bríd Smith (People Before Profit), also on the committee, understood there would “absolutely definitely” be rent increases. “The council is broke. Services have been cut to the bone as it is. If, say, the tax per house is put at a pretty modest €100 a year, well that’s a bill of €2.4 million for the council. There will be no option but to pass that on to tenants.
“It exposes any claim that this is a progressive tax as a sham, and any claim that it is a tax to fund local authorities as a sham too.”
Among the largest providers of social housing are South Dublin County Council, which has 9,000 units; Cork City Council 8,800; Fingal 4,550; Dún Laoghaire-Rathdown 4,400; Waterford 2,969; Limerick 2,781; and Galway 2,265.
All, when asked how they would pay the tax, said they would await guidance from the Department of Finance/Department of the Environment.
A Revenue spokeswoman said: “The local authority, must self-assess the market value of the residential property. There is no special rate applicable.
“Local authority housing and social housing will not be exempt unless it is provided to people with special housing needs such as the elderly or people with disabilities.
“Liability will rest with the local authority or social housing organisation as owner.”
South Dublin County Council has signalled a rent increase, based on ability to pay. Tenants will be assessed in March. The new rent bands will be piloted this year and rolled out next year. Cllr Gino Kenny (People Before Profit), said the time frame “matches exactly the one for property tax. This is the council trying to recoup the tax from tenants.”
The County and City Managers’ Association said: “We await guidance from the Department of Finance/ Department of Environment regarding the implication for local authorities.”
A spokesman said the Department of the Environment was in discussions with the association on how social housing would be valued and how the tax on it paid.
Social Housing Council numbers
9.000 South Dublin
8,800 Cork City Council
4,400 Dún Laoghaire- Rathdown