Families to be hit with two stealth taxes

MIDDLE-INCOME families will be hit with another stealth tax after Environment Minister Phil Hogan confirmed a “household charge” will be introduced from January 1.

The new levy is separate to water charges, which the Government also intends on introducing.

It means that households are effectively facing a double whammy of new charges on top of the financial pain they have already suffered in recent years.

Some clarity emerged yesterday after weeks of confusion about the issue.

The “interim household charge”, as the minister is calling it, will be a precursor to a property tax.

The EU/IMF bailout programme obliges the Government to introduce a property tax next year and increase it the year after.

But the Government says it needs more time to put in place a comprehensive property valuation system to underpin the property tax.

As a result, it will introduce the interim household charge in next December’s budget to satisfy the EU/IMF requirements.

The interim charge will be introduced on a “flat-rate basis”, meaning all households will pay exactly the same until the property tax system is introduced. It means another bill for middle-class households already struggling with increased taxes and reduced wages.

Mr Hogan failed to say yesterday how much the household charge would be. But he said there would be exemptions for those “who are on very low incomes, on social welfare or are under pressure in terms of their mortgages”.

Mr Hogan also confirmed that the installation of water meters in homes would begin early next year.

The bailout obliges Ireland to introduce water charges by 2013. However, Mr Hogan said no water charges would be levied until the meter installation programme was complete, which could take up to three years.

“There will be no flat-rate water charge, but there’ll be a water charge by meter. Over and above a generous allowance for your domestic purposes, you’ll pay a water charge.”

This means households will effectively be hit witha double whammy of property and water charges once the systems for both are fully up and running.

Mr Hogan said he did not see water metering as a “charging or taxation issue”.

“I see it as a very important water conservation issue where there’s a substantial amount of money being wasted through poor pipe networks but, equally, through individuals and businesses not engaging in water conservation to the extent that they should.

“There [are] too many people wasting water at the moment. It’s a finite resource and costs a billion [euro] a year to treat and the taxpayer has to pay for it.”

Mr Hogan attended a water metering conference in Croke Park yesterday where he confirmed he wants to have a state-run company, Irish Water, in place by the end of the year to oversee the metering programme.

Consultants are being chosen to assess how the company should be set up and how work should be transferred to the agency.

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