No €1bn property tax, says Noonan

IMF demands for a €1bn property tax were dismissed by Finance Minister Michael Noonan last night.

Mr Noonan said he did not want people “scared” by the IMF figure, but could not say what the actual bill would be.

Mr Noonan revealed that the new graduated property tax will come into force on Jul 1, 2013, when people will be charged for half of a full year.

Homeowners will not have to top up the present household charge to make up the gap but, from 2014, full yearly rates will be liable, which will be paid weekly, monthly, or in one tranche to the Revenue.

Mr Noonan insisted the IMF recommendations were not binding, as they were part of a separate process to the bailout.

“I wouldn’t intend making a proposal to Government at that level,” said Mr Noonan at the Fine Gael parliamentary gathering in Westport, Mayo.

“If you divide €1bn by 1.6m houses in the country, I think that’s too much at present for ordinary families to bear.

“It is simply advice from the IMF and we are not taking that piece of advice. It is not mandatory to accept the advice, it is simply advice.”

Mr Noonan would not be drawn on whether he favoured setting the tax at market value or site value, but said: “It will come in from mid-year and it will be for the half-year, not for the full year.”

Mr Noonan said people not in the PAYE system would have an obligation to pay it with their tax returns and other levies, such as direct farm payments, would also be received in this way.

Mr Noonan was clear the final details of the property tax would not be revealed until budget day, which he said would be Dec 5.

This appeared at odds with earlier remarks by Taoiseach Enda Kenny, who appeared to indicate that people would be informed about the controversial levy in advance of the December budget.

Speaking about the property tax, Mr Kenny said: “It will be considered arising from the Thornhill Report when it comes before Government in the not too distant future and, at that stage, the Government will decide collectively the nature of the property tax... and spell that out for people so they will know in good time and in advance what it actually means.”

The Revenue has been given the job of collecting the tax due to the mass boycott of the household charge, introduced in April.

Mr Kenny and Mr Noonan both refused to be drawn on reports that the Cabinet had discussed setting the average for the property tax in the low hundreds of euro per year.

Meanwhile, Mr Noonan said there was no deadline for Ireland to negotiate its bank rate deal with the EU.