Property tax may be paid out of pensions

The Government will give property owners who receive State pensions the option of having their property tax payments deducted directly from their pensions when the tax comes into force next July.

Minister for Social Protection Joan Burton said in a memo to the Cabinet yesterday that her department would introduce a “deduction-at-source” scheme for all social welfare recipients by the time the local property tax is introduced.

The scheme will enable such property owners to spread out their payments in instalments between July and the end of the year. Such deductions will not be automatic – recipients must elect to have the tax taken at source.

The development came amid claims on the Government backbenches that the tax will place a disproportionate burden on the owners of property in Dublin.

‘Huge inequity’

Fine Gael TD Olivia Mitchell complained of a “huge inequity” in the way the new tax is calculated, saying on RTÉ radio that the tax due on a Dublin house could be up to six times bigger than that on an identical house elsewhere.

“Nobody, no matter where you live in Ireland, can think that is fair,” she said. “It is going to be difficult to pay and it is going to be extremely unpopular, but every tax has to be fair and reasonable.”

Although most people accepted with reluctance that a property tax was needed, they would “bitterly resent the method that is used to calculate it”, she said.

Such concerns were dismissed by the Government’s spokesman. “The ultimate judgment in relation to it is to vote for it and this has been voted through and it is now the law,” he told reporters.