€100 charge to hit 1.8m households

PENSIONERS, struggling mortgage-holders and thousands of cash-strapped families will be hit with a €100 household charge early next year.

The flat charge will apply to an estimated 1.8 million property owners, regardless of income, with exemptions for those in social housing, stuck in ghost estates or anyone in receipt of mortgage interest supplement.

The Government has been warned the move will be met with a “national reaction” and the start of a fight back against the EU-IMF bailout deal.

The Socialist Party said there will be a national campaign of boycott and refusal to pay.

Environment Minster Phil Hogan warned “there will be enforcement proceedings, there will be penalties for those who don’t comply,” but said local authorities will have discretion to allow for cases of “extreme hardship.”

The Government criticised opposition calls for the new charge to be boycotted yesterday.

Visiting the MacGill Summer School, Jobs Minister Richard Bruton said: “It’s [the boycott] ill-conceived. I think it’s important we are seen to meet our obligations. With any taxes, you’ll always have those who don’t agree with it.”

He said funds were needed to maintain local government services, that would be sourced from the household charge.

The charity for older people, Age Action, said the charge will equal one week’s pension when combined to cuts that have already been made to fuel and electricity allowances. It said it was concerned at “the Government’s failure to acknowledge that many older people are asset rich, but cash poor in that they own their own homes but depend heavily on the state pension as their main means of income.”

But Mr Hogan said the charge is “modest” and will amount to just €2 a week. “It’s a small amount of money relative to what the overall problems are.

“I hope people will come to reflect on that and will be prepared to pay a small contribution of €2 a week for the provision of essential local services.”

He said it is the “lowest possible charge” that could be introduced in order to meet the requirement to raise €160m for local authorities as agreed with the EU and IMF as part of the bailout deal.

“I’d prefer not to be introducing any charge. But I’m obliged because we’ve ceded our economic sovereignty,” he said.

Mr Hogan said 250,000 properties will be exempt from the flat charge, which is intended to be an interim measure lasting two years before the roll out of a fairer property tax system in 2014.

Those who will not have to pay include people in property that is:

* Commercial.

* Government-owned.

* Charity-owned.

* In an unfinished housing estate.

* Social or council housing.

* Owned by a person who has moved to a nursing home.

* Owned by a person on mortgage interest supplement.

The fee will be separate to a water charge which will be imposed on households from early 2014, once a metering system has been introduced and the Irish Water agency is set up this October. “I expect that to be a modest charge for people who are going to conserve water.”

Mr Hogan disputed claims by Engineers Ireland that installing water meters would cost €1.5 billion. The minister said he still believes it will cost €500m and said Engineers Ireland should “stop frightening people.”

Socialist TD Joe Higgins said there will be a campaign of “mass opposition” based on “mass boycotting and refusal to pay.”

He said people will “fight back” against the “injustice that has been perpetrated in this state for a number of years”.

Mr Hogan said Ireland is one of the last countries in Europe to introduce local taxation to fund local services. But Dublin Chamber of Commerce warned there must be a more “direct association between such charges and the services being provided.”