Hogan unveils details of new €100 household charge

 

Minister for the Environment Phil Hogan has announced a new temporary “household charge” of €100 per year.

The new tax, viewed as a forerunner to a property tax and a water charge, will be levied on the estimated 1.8 million householders in the State, potentially raising €160 million in revenue in 2012.

Commercial properties and social housing as well as charity-run and sheltered homes are among properties exempt from the tariff. Younger people struggling to make home loan repayments, who qualify under the mortgage interest supplement scheme, can also qualify for a waiver.

The charge, which was agreed by Cabinet this morning, will be introduced in January next year, with householders given three months to pay up. Late payment penalties have been set at €10 a month.

Mr Hogan said he understood people are already suffering levies, charges and interest rate hikes, but he insisted he had no other option. “I’d prefer not to be introducing any charges but I’m obliged because we have ceded our economic sovereignty as part of the EU/IMF agreement, to bring in a property tax,” he said.

Admitting the tax could be fairer, he said it was a temporary two-year measure ahead of a property tax based on a value in 2014, which would be a “much fairer system”.

At a briefing in Government Buildings, the Minister said the new levy was an interim measure ahead of a full property tax, based on a property valuation system, and was separate from planned water charges. The water tax is to be introduced in 2014.

Trade unions and left-leaning TDs pointed out the poorest homeowners will be forced to pay the same household charge as the wealthiest.

Joe Higgins, Socialist Party and United Left Alliance TD, predicted a “national reaction” involving hundreds of thousands of protesters. “I think people will take the opportunity to stand up and fight back against the massive injustice perpetrated in this state over the last two years,” he said.

Mr Higgins said it was a further and intolerable burden inflicted at a time when living standards were already severely depressed. Meetings organised for across the country in September would galvanise people for a mass boycott, he claimed.

Age Action warned low income pensioners who own their homes and who are already reeling from a cut in gas and electricity allowances would be among the hardest hit. “The combined impact of those cuts and the new charge amounts to the equivalent of one week’s pension,” said spokesman Eamon Timmins. “For people already on the breadline this will cause real difficulty.”

Trade union Siptu president Jack O’Connor said while they accepted the Government was bound to introduce a property charge under the EU/IMF rescue deal, it could have brought in a more progressive tax.

Mr Hogan revealed a new company, Irish Water, will be set up in October, with a chief executive appointed, to begin work on devising a metering system to bill households across the country for water usage.

Separately, at a briefing at Government Buildings, the Minister announced the presidential election and three referendums will be held on Thursday, October 27th. The timing of the election date is a week later than previously indicated because of delays in completing the legislation for the votes.

It was announced later the Government, on the recommendation of the Taoiseach, has appointed Martin Fraser, assistant secretary, Department of the Taoiseach, to be secretary general to the Government and secretary general of the Department of the Taoiseach, with effect from August 1st.

Additional reporting PA