Property tax rates still undecided, says department
The Government has set up an expert group to look at the issue and produce its recommendations by late February or early March — leading to speculation that the charge will be introduced as early as 2013.
The site valuation charge, which will replace the €100 fee to be paid in 2012, was due to be put in place in 2014 under the EU/IMF bailout deal.
A spokesperson for the Department of the Environment said it was too early to say if the tax would be based on the recommendations of the Commission of Taxation.
It proposed charges of €188 for houses up to the value of €150,000; €563 for houses valued between €150,000 and €300,000; €938 on houses between €300,000 and €450,000; €1,313 for houses up to €600,000 and €2,188 on houses valued at up to €1 million.
Socialist TD Joe Higgins said that “people in quite modest ordinary homes, on low to middle incomes, will now be liable for substantial taxes”. He said the “vast majority” of low to middle earners would have to pay between €500 and €1,000 a year, which he described as a “substantial burden”.
The spokesperson for the department said it was too early to speculate on the figures, given that the group had yet to meet.
Donegal North-East TD Joe McHugh (Fine Gael) said the timing of the new tax was “not the best”, but that it would be necessary because “we are in a fiscal, economic hangover at the moment”.
Based on the figures, the charge would raise between €1.2 billion and €1.9bn, compared to the €160m expected to be raised by the €100 charge.
This would alleviate the need to raise income taxes in 2013 because the Government is committed to raising €1.25bn in extra revenue.
Bernard Doherty of the Irish Taxation Institution said the charge was sensible since “property tax is seen as the least damaging to economic activity”.
