Greens push overhaul of property tax, higher carbon tax in government talks

An overhaul of property tax and higher levels of carbon tax than already envisaged are among the proposals tabled by the Green Party in government formation talks.

It is also calling for a wealth tax, an 80 per cent windfall tax on the sale of rezoned land and other taxation moves to encourage efforts to tackle climate change.

Negotiating teams from Fianna Fáil, Fine Gael and the Greens continued their talks on Tuesday with a focus on finance policies.

The Greens are said to have put forward a detailed set of tax policy proposals such as the establishment of a site-value tax to replace the current local property tax.

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However, other sources said the establishment of a site-value tax is being dealt with under the set of negotiations on housing.It would be a charge on the value of the site where a property is located rather than on the value of a property itself.

It would likely mean higher property tax for those living in areas that are well serviced by public facilities, such as cities and towns with good transport links, relative to those in rural areas whose actual homes may be of higher value.

Green Party leader Eamon Ryan has previously said a site-value tax would be used to encourage denser housing development. The Greens' election manifesto says a site-value tax "is a recurring annual tax on the value of a site excluding the value of any improvements or properties".

Carbon tax

The Greens are also understood to favour a higher level of carbon tax than initially envisaged under government policy. The last budget under the Fine Gael-Independent minority government, underpinned by Fianna Fáil, envisaged carbon tax rising to €80 per tonne by 2030, but the Greens want this increased to €100.

Sources also said that the Greens want an 80 per cent windfall tax on the sale of rezoned land, as well as VAT reductions on products that are more energy efficient, as well as a wealth tax on assets. The Green Party manifesto said it would “pursue a wealth tax on individuals holding assets over €10 million”.

It is understood that potentially contentious issues, such as how to deal with the State deficit after the Covid-19 virus and the planned increase in the State pension age, a key point of debate in the general election, have not yet been fully resolved.

One sources suggest that there is general agreement that the deficit would be mostly reduced through economic growth.

How to address the Green Party’s central demand – reducing Ireland’s annual carbon emissions by an average of 7 per cent – has also yet to be dealt with in detail, it is understood.

The Fine Gael submission is said to have referenced spending and taxation measures in its plans to deal with what is expected to be a €30 billion deficit this year, although there is no further detail.

Income tax

Taoiseach Leo Varadkar and Fianna Fáil leader Micheál Martin have said there will be no return to austerity and no increases in income tax or USC as the country emerges from the Covid-19 crisis.

Both Mr Varadkar and Minister for Finance Paschal Donohoe last week warned of the need to limit borrowing and control the budget deficit once the Covid-19 crisis passes.

Mr Varadkar warned that Ireland cannot "borrow cheaply forever", and suggested that once sustained growth returned to the economy a plan for deficit reduction would be required.