Public left in dark over property tax cost

Homeowners remain in the dark about the level of property tax they will face after the Government said no decision has been made on how it will be charged.

Transport Minister Leo Varadkar said yesterday that the Cabinet had yet to decide on how exactly properties would be valued for the tax.

Fianna Fáil called on the Government to be “honest” with the public by releasing the report of an expert group which has made recommendations.

Environment Minister Phil Hogan received the group’s report during the summer but the Cabinet has yet to discuss it.

However, the Government has committed to introducing the tax in the December budget.

The commitment is contained in the latest memo of understanding between Ireland and the troika on the bailout programme, published on Friday, and refers to the introduction of a “value-based” property tax.

This means the more valuable your property, the more you will pay.

However, Mr Varadkar said the Cabinet had yet to decide on precisely how homes would be valued.

“No decision has yet been made on whether it will be [market] valuation-based or floor area-based or site valuation-based — all those decisions have yet to be made by the Government.”

Market-based means assessing the property based on its market or rental value. Unless concessions are granted, this could put urban homeowners at a distinct disadvantage because of the higher value of properties in cities.

Values based on floor area mean valuing properties by their size. This could see owners of large rural homes pay more than owners of smaller but more valuable urban properties.

Site valuation means measuring the value of the land, rather than any buildings or improvements that are on it. The 2009 Commission on Taxation indicated that while there was a “strong economic rationale” for this option, it would be very difficult to implement and therefore did not represent “a pragmatic approach”.

Once a valuation system is in place and the property tax is up and running, it will replace the much-criticised €100 household charge. However, the tax could lead to many homeowners having to pay a multiple of that amount, depending on the valuation method chosen.

The Department of Finance said yesterday that the Cabinet would consider the report of the inter-departmental expert group, chaired by former civil servant Don Thornhill, “in due course”.

It also insisted the tax would be “progressive and fair”.

Fianna Fáil environment spokesman Barry Cowen called on the Government to be “upfront” with the public and publish the report immediately.

“Has Minister Hogan learned nothing from the household charge fiasco? The Government’s failure to communicate properly with the public and to introduce a fair system based on people’s ability to pay resul-ted in unnecessary chaos.

“The fact that they would go ahead and make such an agreement now, without having the decency to publish the expert advice they themselves commissioned, is further evidence of how disconnected they have become in a short period of time,” said the Offaly TD.