Changes to property tax but no widespread review
The Government has resolved to change elements of the incoming property tax but it has refused to yield to the clamour for a fundamental review of the charge.
The move, to be made public today by Minister for Finance Michael Noonan, will increase the number of exemptions to the tax.
But Government sources indicated last night that there would be no reprieve for homeowners who made big stamp-duty payments at the height of the property boom.
Measures to ease the disproportionate burden on property owners in Dublin, a source of contention for some Government TDs, have also been ruled out.
Under one new exemption, however, all local authority and voluntary housing association homes will be put into the valuation band for properties worth up to €100,000, the lowest of the bands.
This will yield respective annual savings of €135 in respect of local authority and voluntary housing association homes valued at up to €150,000 and a €225 saving if such homes are valued at up to €200,000. In cases where homes have increased in value as a result of extensions or other works to help residents with disabilities, the rise in value will be discounted.
Pyrite damage exemption
Under a further measure, previously signalled by Mr Noonan, the tax will not be levied on houses that require remedial work due to damage caused by pyrite.
The sources said the Government remained determined to proceed with the tax from the middle of the year, adding that funding was not available to pursue an alternative. The new tax is also an element of Ireland’s EU-International Monetary Fund rescue programme.
With the tax already signed into law, Mr Noonan will introduce an amending Bill today to give effect to the changes.
This will be published alongside the Finance Bill, which will give effect to the measures set out in the budget in December. According to Government sources, the Finance Bill will include a number of new measures to promote small and medium-sized enterprises.
These are likely to include new reliefs to encourage research and development in the small business sector and measures designed to foster investment in small hotels and BB accommodation.
Also mooted last night were measures to protect bus companies and other tourist industry interests from fuel price increases. These would follow similar moves for the haulage sector.
In addition, there will be pilot schemes in Limerick and Waterford to encourage investment in urban regeneration projects.
These will be specifically targeted at owner-occupiers – not developers – and will take the form of relief on the refurbishment works on existing rundown buildings to bring them up to a habitable standard.
The idea behind the scheme, which may be expanded at a later date, is to regenerate city life and to support local tradespeople and small business in the construction and building sector.
The Finance Bill will flesh out a range of other budget measures designed to boost the small business sector. The plan aims to help their cash-flow position, improve access to funding, reduce costs associated with tax compliance and boost demand in new markets.
This includes a reforming of the three-year corporation tax relief for start-up companies to allow unused credits to be carried forward to help create jobs and improve cash flow.