Granny flats taxed as second property

GRANNY flats and independent living spaces for elderly people near their families will be subject to a €200 second-home tax which is expected to be imposed as early as next month.

Concern was raised last night that residents of nursing homes would also have to pay the levy on their original houses under the second-home legislation announced in last October’s budget.

But Environment Minister John Gormley has asked the Attorney General to review the Local Government Charges Bill 2009 before it is enacted to be absolutely sure that the €200 tax will not apply to those in long-term care settings.

Confusion over the proposed levy emerged last night when the laws were debated in the Seanad, after which Fine Gael issued a statement saying the tax would apply to nursing home residents as this would be considered their primary dwelling.

The statement was dismissed by the Government as “scare-mongering” and Mr Gormley addressed the Seanad to clarify the issue: “It was never the intention that the bill should seek to charge people in this position.”

He said that “for the avoidance of all doubt”, he will seek advice on the matter before it is debated in the Dáil next week and “take whatever steps are necessary to ensure that a liability for the charge does not arise for such people”.

The tax will apply to sons or daughters who build a separate dwelling for their elderly parents beside their own home.

“Where those living in the accommodation do not own the granny flat, the owners will, in common with others who own second properties, be liable for the charge,” the minister said.

However, after a number of senators appealed to the minister to make an exemption in these cases, he said: “I will consider the matter overnight, and we will see what we can do.”

Fine Gael Senator Ciarán Cannon said those looking after elderly people in so-called granny flats are “taking the burden of care from the State and this is something the State has been encouraging for a number of years.”

He said: “On the one hand, we are encouraging people to do this and on the other hand we are seeking to extract €200 a year from them for choosing to assist the State in the care of the elderly people. It’s €200 a year at the moment, who knows what it will be this year or the year after.”

Senator Pearse Doherty, Sinn Féin, said the levy was unacceptable: “I personally think this is the wrong signal you are sending out. It will go to the core in communities right throughout rural Ireland,” he said.

Senator Paul Coghlan, Fine Gael, said the levy on granny flats “is anti-good- state social policy”: “Here are people who are doing the State a favour. This must go against everything you believe in.”