Homebuyers will have to inform on sellers who cheated their way to a lower household charge under new tax rules.
Under the rules, buyers will be obliged to tell Revenue if the previous owners put a dwelling in a band clearly lower than the selling price.
Offending vendors will be fined €500 if they refuse to reveal their band declaration to buyers in a move that provoked fears about a further depression of the property market.
As the Government unveiled minimal changes to the property tax measures, Fianna Fáil attacked what it called the “snitch clause” and accused the Government of tweaking legislation rather than easing its burden on struggling families.
Finance Minister Michael Noonan ignored lobbying by Fine Gael TDs to soften the impact of the tax, which is to begin in July and be collected by the Revenue.
Homeowners will self-assess their property’s value and place it into bands, paying from 0.18% to 0.25% of the value of the dwelling.
Fianna Fáil’s finance spokesman Michael McGrath said the “snitch clause” could impact on the property market.
“This will clog up the system and impact on the number of transactions, he said. “Buyers should not be Revenue watchdogs.”
Critics said it was unfair that local authority properties would be placed in the lowest band, as this could lead to a situation where someone who bought their council home would pay a far higher rate than was due on a same size dwelling next door which remained in council ownership.
The amendments to the property tax legislation also saw exemptions for pyrite homes, those owned by charities, and those amended for disability use.
Owners in personal insolvency arrangements will be able to defer the tax for three years, and the same moratorium will apply to homes involved in probate.
Tax breaks to encourage owner-occupiers to renovate Georgian homes and business premises in Limerick and Waterford were also included in the Finance Bill.
Mr McGrath expressed concern at the “blatant unfairness” of the property tax because it bore no relation to people’s ability to pay. He said the Government should have increased the universal social charge for top earners instead.
Sinn Féin’s finance spokesman Pearse Doherty, who is to introduce Dáil legislation to try to repeal the property tax in coming weeks, said homebuyers should not be under obligation to inform on sellers — even though only vendors would be liable for the penalty fine.
Meanwhile, the Department of Finance denied that public sector employees face a fresh squeeze on benefit-in-kind items such as company cars and preferential loans. A spokesperson said “clarifications” regarding such benefits in the bill were intended to equalise the public and private sector.
It emerged via a parliamentary question that while individuals will be liable to pay the tax on unsold properties, developers will be exempted under a loophole.
The Finance Bill also gave effect to tax relief for the film and TV industry and the excise rebate for the transport sector.
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