Minister for Finance Paschal Donohoe deferred the revaluation of property tax for a year because of the “significant but geographically uneven increases in price levels” of properties.
The Minister faced significant criticism following his decision to defer changes to the property tax, which had been described in some quarters as populism in advance of a potential general election.
But defending his approach in the Dáil, Mr Donohoe said he believed further consultation was necessary to meet his condition that “there should be relative stability for all taxpayers in their liabilities and that any increases should be modest, affordable and fair”.
He told Fianna Fáil finance spokesman Michael McGrath that the year-long deferral from November this year until November 2020 would give the Oireachtas budgetary oversight committee time to consider the review report on the tax conducted by a number of Government departments and the Revenue Commissioners.
Two exemptions
Asked what changes he planned to make to income thresholds to allow for deferral of the tax and other exemptions, the Minister said two exemptions would continue to apply including the deferral of tax on properties bought by first time buyers until November 2020.
Mr McGrath pointed out during Dáil finance questions that the key issue was around 11,800 properties bought between January 2013 and 2019.
But he said the figure was probably between 50,000 and 60,000 because buyers did not have to register their new properties for tax.
The Minister said Mr McGrath’s figure of up to 60,000 properties was “ahead of my understanding of what those figures are” but he would confirm it with the Revenue Commissioners.
Mr McGrath also quizzed the Minister about whether he “received any advice that not proceeding with the revaluation of properties raised some constitutional questions”, because questions had been raised about this.
But Mr Donohoe said “I believe a deferral of one year, while showing that I intend to use that period in order to gain agreement for the future of this tax and its retention, is well inside the space of what can be deemed constitutional”.
