Eoghan Murphy to change rules on property tax

Housing Minister Eoghan Murphy has confirmed he is planning to amend the rules governing property tax rates to avoid massive increases in bills from next year.

Mr Murphy says bills will no longer be based solely on the value of homes, as is the case, when the current billing regime comes to an end in 2019. Speaking to the Irish Examiner, a spokesman for Mr Murphy said he and Finance Minister Paschal Donohoe are to examine a new billing process in the “coming months”.

It is understood the first meeting to discuss any possible change could take place in the coming days.

The Department of Finance says it would not be making any comment on what possible changes may or may not take place in relation to property tax.

As of now, homeowners face significant increases in their property tax bills, which are collected by Revenue, due to the sharp rise in house prices since levels were set in 2013.

“I would like to see a more fundamental change to how the local property tax is calculated, to one that isn’t linked exclusively to the perceived market value of a home,” Mr Murphy said.

The structure of the property tax has been the source of criticism from Dublin TDs, who feel it is “grossly unfair”. Property tax bills are four times higher in parts of Dublin than in more rural parts of the country. One in every three euro in property tax raised last year was paid to the four Dublin local authorities.

Mr Murphy said he would not be making any assumptions about property tax and said a number of proposals will be considered before a final decision is reached.

“I think solely having a tax that is linked to a perceived market value of a home isn’t going to be fair on the homeowner in terms of their ability to pay, but neither will it necessarily meet the needs of the local authority in terms of its funding. So we are looking at new ways of potentially funding the local authorities using the property tax,” the minister told the Sunday Independent.

Meanwhile, Transport Minister Shane Ross is demanding waivers to be introduced for older people who live in expensive homes but could have a fixed source of income and may be “pension poor”.

Mr Ross has said he considered the property tax a form of “double taxation” as in most cases homeowners had already paid stamp duty on their property.

“I think it is a tax which is very unfair in its implementation and very unfair to people living in Dublin,” he said.

Wednesday is the deadline for homeowners to notify the Revenue Commissioner of their intention to pay the charge by credit card, debit card, or cheque. This is the last year of property tax payments before the freeze on rates expires in 2019.