Property tax to be taken from PAYE workers first

PAYE homeowners who refuse to pay the property tax will be the first to have money deducted from their pay packets from July, the head of Revenue has said.

Josephine Feehily also revealed local authorities will be entitled to raise the tax by 2015 — despite the fact that homeowners must retain the same property value for over three years.

By yesterday, 638,000, or an estimated 43%, of homeowners had registered to pay the tax. Ms Feehily told the Oireachtas Public Accounts Committee (PAC) an analysis of payments would be begin by the end of May.

“We need to then segment the non-engagers, the non-responders, into various risk tiers and various categories.

“We will be moving then into mandatory deduction from people who are in employment. That will certainly begin to be felt in July.”

Revenue will next target non- payers who have occupational pensions and then those in receipt of welfare payments. By October, following a round of reminder letters, self-assessed workers will be targeted.

Efforts to force compliance would “move along in tiers”, said the Revenue chairwoman.

“We have to get to the point where we see what’s the make-up of the non-engagers, then we’ll dice them into segments and we’ll assign them different treatments.”

The legislation also allows local authorities to apply for increases to the charge in their areas by September next year, and for any change in levels to kick in by the following January.

Currently, properties valued under €1m will pay the tax at 0.18% while properties over that value will be liable at 0.18% on the first €1m and 0.25% on the balance.

A 15% increase on a property valued at between €250,000 and €300,000 would see the tax rise from €495 to €569 per year.

Fianna Fáil said property owners would be stunned to hear that they could face a hike in the tax after the local elections next year.

Public expenditure spokesman Seán Fleming said: “This is a deeply cynical move by the two Government parties. As soon as Fine Gael and Labour get the local elections out of the way they intend to hit families again.”

Revenue has been given a budget of €26m this year to set up and run the property tax collection, funds which will come directly from homeowner charges. An estimated 400 staff are working on the tax.

Elsewhere, Ms Feehily said yesterday that Revenue was still trying to claw back over €2bn in unpaid Vat. About €37m of this debt dates back over 10 years, she said.