Property tax raises hackles

THE conference heard calls for the abolition of the residential property tax as part of a heated debate on property taxation.

THE conference heard calls for the abolition of the residential property tax as part of a heated debate on property taxation.

Mr Tony O'Brien, of KPMG, pointed to his recent report on local government financing, which concluded that a property tax was a "viable option" for local government funding.

The report was produced for the Government. Such a tax could bring in between £300 million and £400 million, he said.

However, Dr Tom McCarthy, of Maynooth College, insisted that the suggestions provided no basis for practical reform.

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"It is foolish to speak of an ideal system of taxation," he said. "Redistribution is not the business of local government."

He said service charges ought to be the only type of funding available to local authorities.

Local authorities should be precluded from levying commercial rates, he argued. Any revenue loss - should be met through a general grant funded by central government.

He called for the abolition of residential property tax. Any revenue loss should be recouped by alterations in mortgage interest tax expenditures, he argued.

He pointed out that 77 per cent of the tax was collected in Dublin, with 33 per cent raised in Dublin south county and Dublin 4 alone.

According to the ESRI, environmental services provided by local authorities were being underpriced.

This led to over usage and wastage, as well as excess pollution damage to the environment, according to Mr John Lawlor and Ms Sue Scott of the institute.

They called for an increase in charges. The EU is currently paying a large share of the costs of local services, but after 2000 the costs would have to be funded domestically, they said.