Property tax based on house value to be in force by mid-2013

Tue, Aug 28, 2012, 01:00

A PROPERTY tax based on house valuation is set to be in force by the middle of next year as part of the troika bailout programme.

Minister for Finance Michael Noonan yesterday insisted the system had not been finalised, but the Cabinet has agreed the tax will form part of December’s budget.

The Cabinet is due to give further consideration to the issue at its first meeting after the summer holidays, which will be held next Tuesday.

In documents released last Friday, it emerged the Government has informed the troika the property tax will be based on valuation. While Ministers insist no final decision has been made, it appears the rate of the tax is the only major outstanding issue.

Speaking in Limerick yesterday, Mr Noonan said the new tax will be introduced next year, as required under Ireland’s agreement with the troika. “The detail of the property tax has to be worked out. All that has been decided is that there will be a property tax on family homes and that property tax will be collected by the Revenue Commissioners. Of course I have a preference and I’ll be stating it at Cabinet,” he said.

Mr Noonan refused to speculate on how the tax would work and would confirm only that the Revenue Commissioners would be responsible for collecting it. He described the tax as a budgetary matter and warned the budget framework would include tax increases and cuts to services. “We are still as a country spending a lot more than we collect in taxation and there’s only two possible ways of closing the gap. One is to cut what we spend and the other is to increase taxes.

“It’s very hard on people – there’s no doubt that people are paying the price of what happened at the peak of the Celtic Tiger . . . I’m not making light of it. The issues are very serious and the burden being put on our fellow citizens is a very serious burden and they are having tough times.

“All I can say is if we stick with it, we are going to work our way through it.” He was speaking at the opening of the new Eason store at the Parkway Shopping Centre.

Fianna Fáil environment spokesman Barry Cowen accused the Government of sleepwalking into another “fiasco” along the lines of the household charge.

“I have serious concerns about any property tax based on the market value of people’s homes,” he said.

“Such a system unfairly targets city homeowners and fails to take into account people’s ability to pay. Take for example a pensioner living in one of the more sought-after areas in Dublin. Their home may be valuable, but they have a very low income and simply cannot afford hundreds of euro a year in extra taxes.”

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