Mortgage crisis sparks renewed opposition to property tax

The Government is facing pressure to postpone the property tax and prevent a wave of repossessions following the latest statistics on the mortgage crisis.

Reacting to figures showing that one-in-four family homes’ mortgages are in arrears or have been restructured, Fianna Fáil said it was the wrong time to introduce the tax.

TDs will debate and vote on property tax legislation today, ahead of its introduction in mid-2013.

Fianna Fáil finance spokesman Michael McGrath said: “The reality is that 180,000 mortgage holders are experiencing difficulty in repaying the mortgage on the family home at this time. What is the logic behind introducing a property tax on people already struggling to pay the mortgage? The truth is that a huge number of families will simply not be able to pay this property tax.”

Commenting on an expected increase in repossessions of homes by banks next year, opposition TDs also questioned the Government over planned legislation to empower lenders to seize properties.

Independent TD Shane Ross asked if there would be a wave of repossessions as the Government moves to close over a legal loophole which prevents banks seizing properties bought before 2009.

The Dublin South TD warned: “There will be open season on home owners in 2013 because that legislation will not plug a loophole, rather it will allow the banks to repossess at will. State-owned banks are going to be used as agents, with the connivance of the Government, to put people out of their own homes, on a scale unseen so far.”

However, Tánaiste Eamon Gilmore said the Government wanted to keep troubled mortgage holders in their homes and the Oireachtas would next week debate radical new insolvency legislation to help homeowners.

Mr Ross though also warned that the “heavies” or Revenue would tax people’s pay and income directly for the new property tax later this year. This move would particularly affect the vulnerable and those on lower incomes, especially if the new tax is deducted straight from social welfare payments, he argued.

Speaking in Brussels, Taoiseach Enda Kenny warned of scare mongering by the opposition. He said the call by the troika for a legal loophole on repossessions to be closed would be clarified once personal insolvency legislation was introduced.

“People should be really reassured that as far as the Government is concerned that we value and appreciate the importance to Irish people of having their homes and being able to retain them and its only in a very small number of cases that these kinds of things apply so scaremongering is not and should not be used to scare people.”

 

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