TALKING PROPERTY:THIS week started with a bang. By Monday lunchtime the airwaves were buzzing with ordinary people threatening to face a jail sentence rather than pay a property tax, writes ISABEL MORTON

Only hours after details of the Commission on Taxation report became known, people started reacting to the proposals. And they were angry.

And there is no doubt about it but things have gone from one extreme to the other.

It’s as if the captain of the ship, having at one point ordered everyone to move to the starboard side, suddenly instructs them to move to the port side. The ship is permanently off kilter and in danger of sinking.

It’s been bad enough trying to figure out whether the introduction of Nama might get our banks lending again and hence kick-start the property market, but now we have another entirely different problem to contend with.

The Commission on Taxation report was no more than a list of over 200 recommendations and the Government is unlikely to adopt all of them. But such is the fear of more pain, that the mere suggestion of further taxation, particularly in relation to property, generated a sudden and strong public reaction.

There is an element of schizophrenia about the manner in which the Government spent the last decade or so encouraging us all to invest in property and is now punishing everyone for it, as if we were guilty of having committed a serious crime.

The proposed annual property tax of 0.25 per cent or 0.3 per cent of the property valuation, (if they can be valued at all these days) even based on recently reduced prices, would be seen by many homeowners as severe. Some could simply not afford to pay it, particularly those living in Dublin, whose homes are worth so much more than their rural counterparts.

Having once had a property tax, which was abolished due to the fact that it was found to be inequitable, it seems extraordinary that it is once again being considered. And this time around, after over a decade of building and buying, far more people would be caught in the net.

The mistaken belief that only rich people own a lot of property will be knocked on the head when we learn the results of the new €200 property levy on non-principal private residences. The truth is that vast numbers of very ordinary Irish people were encouraged to borrow in order to buy investment property. A wide range of people, from lawyers to labourers, bought a property or two as a long-term investment for their old age, or for their children to inherit.

Buying investment property was encouraged at every level by the Government via Section 23 and similar schemes, and by the banks who encouraged lending and were very generous about giving out large loans and mortgages based on the equity people had built up in their own homes.

Now we are being punished for having done what we had been encouraged to do and are suddenly treated as if we are oligarchs who have an endless supply of cash with which to pay property taxes.

We borrowed to buy these properties and despite lower interest rates, now that capital values have been halved, rent yields have dropped and property taxes are being introduced in various guises, (the €200 levy and the BER cert), we have little hope of being able to keep up our bank repayments, let alone pay additional taxes.

The Commission on Taxation’s proposed abolition of stamp duty should have been welcomed but instead, the mere fact that it has been suggested yet again will result in nothing more than hammering another nail into the property market’s coffin.

The last time the possibility of stamp duty reform reared its head, the property market ground to a halt. Nobody wanted to be the last fool to pay stamp duty on a property just before the tax was abolished. And of course, it never was.

The timing of the announcement of the Commission of Taxation’s report, having taken 18 months to compile, was not, to put it mildly, ideal. It has distracted us from Nama and the Lisbon Treaty and has sent us all into a spin. The fact that this report is nothing more than a long list of recommendations rather than actual implementations is beside the point as these days we are so nervous, tense and angry that we overreact to even the smallest suggestion that things may get any worse. There are, after all, limits. And we may just have reached them.

Talking Property