Government unlikely to introduce proposed site-value property tax

THERE IS no prospect of the new property charge proposed in the revised programme for government being introduced in the lifetime of the current administration, Green sources have confirmed.

Drawing up a valuation system for the proposed site-value tax would take at least two years, Green Party chairman Dan Boyle acknowledged yesterday.

The programme contains a commitment to “move to introduce” a site-value tax for non-agricultural land to provide a fair and stable basis for offsetting stamp duty, but provides no further details.

Mr Boyle said the tax would apply to both commercial and residential property but added that the details have yet to be worked out. The amount to be paid would be determined by factors such as the size of the site, the zoning of the land and its location.

He claimed the reference to the tax in the programme for government wasn’t even a commitment to its introduction per se, but rather a promise to develop the underlying methodology.

The tax would replace commercial rates but would raise more money for local government through its wider application to domestic properties. The manner in which it would offset stamp duty has yet to be worked out.

The Greens argue that existing commercial rates or a property tax act as a disincentive against improving a property, whereas the site-value tax would not. The tax could also be configured to discourage developers from leaving sites derelict. Mr Boyle said the objective underpinning the Green Party’s tax proposals was to increase the basket of taxes, rather than the amount of taxes, so there was less reliance on individual sources of tax revenue that could be subject to fluctuations.

Minister for Communications Eamon Ryan said the site-value tax provided a very sustainable source of funding for local government by avoiding a “boom and bust system”.

“This proposal is very widely spread and fair and all sections, all different buildings, are paying into it so you don’t have one section left out. You don’t have local government in the financial crisis that it is at present because you are so aligned to development levies or speculative property tax.”

Mr Boyle said the Land Registry office and Ordnance Survey would be tasked with the job of developing an appropriate valuation system for the tax.

The Greens’ recommendation leans heavily on a proposal made by Chambers Ireland in 2004 for a site-value tax on all property except family homes. It claimed the tax could generate €3 billion a year. Yesterday, Chambers Ireland head of policy Seán Murphy said the Greens’ proposal was “better late than never” though the right time to introduce the tax was during the boom.

He expressed concern that the proposal would result in the creation of an elaborate new tax regime to fund a Government that was costing too much.