Putting a price on the property tax

While the property tax may be new to Irish home owners, it is the norm in much of the rest of the world. We look at how much other countries pay and who is liable for it

WHILE WE KNOW we will have to pay property taxes within 12 months, the powers that be have yet to tell us how much that is likely to be or how it is going to be levied. Speaking last week, Minister for Finance Michael Noonan insisted the system had not been finalised and the Cabinet will today give the matter some thought when it meets for the first time after its long summer holiday.

The Government has told the Troika the tax will be based on a property’s valuation but the rate of the tax has yet to be decided. We do know the Revenue Commissioners will be responsible for collecting it, so the Government can avoid the civil disobedience that manifested itself when the household charge was introduce.

While the property tax may be new to Irish homeowners, and about as welcome as a cold sore, it is the norm in much of the rest of the world although nowhere, it appears, is the process simple. Or popular.

France

France funds local services through a set of property-linked taxes and charges that apply across the country. The most significant are the taxe foncière, a property tax for which the owner is liable, and the taxe d’habitation, a residence tax paid by the occupant of the house or apartment (an owner-occupier must pay both).

Both of these taxes are levied by the state but channeled to local authorities, which have the power to set the rates (up to a limit laid down in law). The amounts vary considerably, as they depend both on the rate chosen by the city or region and the notional rental value of a property. For example, a two-child household with an average income paid €444 in taxe d’habitation in Paris in 2010 compared with €1,162 in the heavily indebted city of Marseille. Various reductions or exemptions are provided for the elderly, students, people with certain disabilities and those on low incomes.

In addition to the two main household taxes, there are smaller levies and charges that local authorities can use to generate income for specific services. These include a rubbish collection tax (calculated from the notional rental value of your home) and a street cleaning tax (based mainly on the type of street). Households also pay for the water they use. Rates vary from region to region, but are calculated via water meters in houses and apartment buildings. That system is usually managed by private companies, and their involvement in local water provision has occasionally been a source of controversy. RUADHÁN Mac CORMAIC