Grandstanding on property tax

 

AS A State, we are living so far beyond our means that the Government borrows €1.3 billion a month for public pay, pensions and vital services. The only way this money can be raised is through the IMF-EU bailout agreement. A condition of the agreement requires the introduction of a property charge, something that has been known for three years.

Now that it is being implemented, however, a number of left-wing and Independent Dáil TDs seem to regard it as a ticket for their re-election and have launched a civil disobedience campaign. It is a shabby piece of grandstanding that could cause immense hardship to those householders who follow their advice.

Urging people to break the law can only be justified in limited circumstances and then on the basis that it brings a high probability of positive change. That does not apply in this case. Funds from this household charge will go towards local authority wages and services. Without it, water, sewage and transport facilities will be affected, as will householders. The charge is unfair to those people who live in modest homes, compared to larger property owners. But it is an interim measure, set at a modest level and exempting many low-income families. A valuation-based system will replace it in two years.

Nobody likes to pay tax. Because of that, Ministers run a mile before considering a new one. This time, successive governments ran out of road. In the absence of IMF-EU pressure, the influence of prominent people with large, immovable assets would probably have killed the legislation stone dead. As it is, a flat-rate charge of €100 does not pose a significant threat. A property charge is generally regarded as an important step towards creating fairness within the taxation system. That is why the behaviour of dissenting TDs appears to be so perverse.

Ireland is the only EU state, apart from Malta, lacking a property tax. It wasn’t always the case. A domestic property tax based on self-assessment was introduced in the 1980s. But evasion was so widespread that former taoiseach Albert Reynolds famously remarked that a delivery boy on a bicycle would identify more qualifying properties in Dublin 4 in half-an-hour than had been registered with the Revenue Commissioners for many years. Abolition of the tax in 1997 contributed to the property bubble.

Resistance to new property-based charges is taking a number of forms. In addition to the “refuse to pay” campaign initiated by some TDs, the Irish Property Owners Association has advised landlords to pass on charges to their tenants, although this is specifically banned by legislation. Breaking the law in that instance has been justified on the grounds that an unspecified service is being provided. In rural areas, resistance to a septic tank inspection charge is being encouraged by prominent Fianna Fáil TDs, even though the party endorsed the measure while in government. Such contempt for basic civic morality is shocking, particularly at a time of financial crisis.