Property tax and income tax
Sir, – While many tend not to notice or “feel” the amount of income and other deductions they pay, the current focus on property tax will make some question their relative proportionality. It’s worth asking if, were our economy to operate as it’s supposed to, the two would seem to be in a fair parallel.
A home buyer is traditionally allowed to borrow three times their salary, and in recent years is expected to save a 20 per cent deposit. In theory then, in order to buy a home for, say, €750,000, one would need to save €150,000 and earn €200,000 to confidently borrow the balance. For any given house price one can easily derive similar figures. It is worth noting that on such an income, a single person would pay, in income tax, PRSI, and USC, €90,491 per year or €1,740 per week. Thus the weekly tax take exceeds their annual property tax of €1,627. As many people will vociferously object to the latter, it’s worth remembering the former. It is difficult to argue that a property tax of less than a week’s wages is a draconian imposition. The same logic applies if buying a €400,000 home on an income of €100,000.
Given that our average house price (at €276,000) is about seven times the average wage, there is no way to make meaningful calculations for most of our people.
Anyone earning around the average wage is unlikely to be liable for much in either income or, perhaps more unfortunately, property tax. – Yours, etc,