McGrath slams Minister's property tax plan

Finance Minister Paschal Donohoe’s plan to raise property tax levels has been heavily criticised by a Cabinet colleague who said “people are already under enough pressure” and cannot afford the extra costs.

Disabilities Minister Finian McGrath risked causing fresh division within the Fine Gael-Independent Alliance coalition as Fianna Fáil finance spokesman Michael McGrath said a “clear picture” of how much more people may have to pay must be revealed by the Budget.

In recent days, Mr Donohoe said he is considering raising the local property tax as part of a new system due to be introduced in 2020.

While Mr Donohoe said he believes any increases will be “moderate and affordable”, concerns have been raised over the specific level of increase planned, fuelled by surging house prices.

Mr Donohoe said at the weekend any increases “will be moderate, they’ll be affordable and they’ll be well understood by people in advance of that”, but declined to outline what the increase may involve.

However, yesterday, Finian McGrath said he is strongly opposed to any property tax increase and that extra costs would put people already struggling under unnecessary added pressure.

From my point of view, I don’t see it as a property tax, I have always had concerns about a home tax.

“I have no problems about taxing property and wealth, but when it comes to a person’s individual home I would be very much opposed to any increase in that because people in houses and people trying to buy a house and people there already are under enough pressure,”he said.

Michael McGrath insisted any changes must be made clear before the October budget in order to give people a chance to adapt.

He said people cannot afford increases of hundreds of euro in 2020, adding that he believes changes to existing local property tax rates could limit the impact on ordinary people.

“I think it’s important to give people certainty as soon as possible in relation to property tax. It will be 2020 before any changes come into effect as a result of re-evaluation next year, but it’s very obvious to us we allow people to move up several bands given the very significant property price increases since 2013.

“It’s not acceptable people looking at an increase of several hundred euro in their property bill. We need to have certainty by Budget time. Paschal Donohoe indicated this review by August, so we want to have a clear picture in property tax by October,” Mr McGrath told Newstalk radio.

Meanwhile, it has emerged that a State scheme to incentivise companies to build affordable homes has yet to pay out any money since it began in November 2015. The Development Contribution Rebate Scheme allowed developers to apply for a refund of development levies if they were building more than 50 units and selling them for less than €300,000 in Dublin and €250,000 in Cork.