Head of auctioneering body warns against property tax

 

THE NEWS that a valuation-based property tax is set to be in place by the middle of next year was met with a mixed reaction yesterday.

Liam O’Donnell, president of the Institute of Professional Auctioneers and Valuers, described the introduction of a property tax at this juncture as “absolutely crazy”.

“Undoubtedly it will cause problems. It will certainly affect the recovery of the property market,” he said.

Mr O’Donnell, whose organisation represents 900 auctioneers and valuers in the Republic, said: “We have people in negative equity and people struggling to pay mortgages. It just can’t be right to consider levying these people with an additional tax.”

Describing the tax as “selective”, he said: “It’s taxing only the people who have gone to the trouble of buying and arranging mortgages. They probably have families and have spent on education . . . There is so much coming down the track with water charges, another tax is not going to help anybody. It’s certainly not going to help the property market.”

Roland O’Connell, president of the Society of Chartered Surveyors Ireland, said his organisation “could see the sense and fairness of having a residential property tax in lieu of stamp duty”.

He said compared with stamp duty a property tax was “relatively predictable, stable and fair, which we believe is better for everybody”.

He said the fairest way to levy the tax “might turn out to be a combination of methods, such as 50 per cent to size and 50 per cent to value”.

He said exemptions would have to be made for the elderly and those on lower incomes.

“In principle we agree with this tax in lieu of stamp duty if it’s fairly applied,” he said.

Age Action Ireland said any property tax would “render meaningless the sacrifice of low- and medium-income families who have scrimped to buy homes to pass on to their families while paying very high income tax”.

In a statement, the organisation said to avoid hardship among low-income families any tax should be based on income rather than value “to allow for people whose home has acquired a high market value that does not reflect their income or ability to pay”.

It called for the percentage value the Government is allowed charge against a property to be capped.

It said that this had to be done to protect the property of older people potentially having three charges levied against it: the property tax, the Fair Deal scheme and the proposed community care charge.