€2m more raised this year in tax on second properties

NEARLY €2 million more has been paid by the owners of second homes in non-principal private residence (NPPR) charges this year than in the same period last year.

The €200 charge was paid in respect of just under 10,000 additional properties by last Saturday’s deadline than had paid by June 30th last year, according to figures from the Department of the Environment.

A total of €49,676,020 has been paid this year by the owners of second houses, including holiday homes and investment properties. This brings the total brought in by the charge since its introduction in 2009 to €265.5 million.

It is thought that the introduction of the €100 household charge may have helped to draw out of the woodwork some of those liable for the second home tax but who had been withholding payment.

The NPPR database and the register of private rented accommodation held by the Private Residential Tenancies Board were the first sources of information used to identify homeowners who had not registered for the household charge. Second-home owners fearing more intense scrutiny of their assets may have decided to pay the charge on time rather than risk penalties.

Meanwhile a first batch of letters, about 100,000, have started to go out to homeowners who have not paid the contentious household charge and posting will continue on a staggered basis, the department said.

The penalties for not paying the second home charge – €20 per month for each month the tax is overdue – are far more punitive than those that apply to the household charge. The household charge penalty is just 10 per cent for the first six months after the due date of last March. This increases only to 20 per cent on arrears overdue for between six and 12 months and to 30 per cent for arrears of over one year, although there is an interest penalty of 1 per cent per month.

By the deadline last weekend 248,258 property owners had paid the second home charge compared with 238,720 paid by June 30th last year. By the end of 2011, 330,205 people had paid €69.3 million. This was less than in the previous two years, with €72.6 million paid in 2010 and €73.8 in 2009.

The money raised by the charge is used to fund local authorities. Dublin City Council has collected the largest amount to date – some €48,944,400. Cork County Council raised €21,718,920 followed by Fingal County Council with €13,583,260.

While Dublin and Fingal in particular would have a strong rental market, with the charge likely to come from investment properties, the county which drew in the fourth highest amount from the charge was Donegal County Council, with €12,187,380. This is likely to be largely generated by people from outside the county with holiday homes. Donegal has had one of the lowest rates of household charge payment.

Holiday homes also generated good returns for Kerry County Council, which has collected €11,821,060, and Wexford County Council, at €10,529,220.

A spokeswoman for the Department of the Environment yesterday said more than 975,000 households, or almost 60 per cent of all households, had registered for the household charge so far. Some 958,000 properties have paid and approximately 17,000 properties have registered for a waiver.

The Campaign Against Household and Water Taxes accused the Government of having “ordered local councils and the LGMA [Local Government Management Agency] to send warning letters to non- payers of the household tax in an attempt to panic people and break the boycott”.

An independently-chaired expert group established to consider the full property tax to replace the household charge has recently completed its work and presented a report to Minister for the Environment Phil Hogan.

Green party leader Eamon Ryan said the Government was “making a hames” of the introduction of a property tax. “They got it wrong in the way they introduced a householdcharge and they appear ready to make an even bigger mistake by abandoning their own commitment to a site value tax” in favour of a tax based on the value of a household property.