Those tall Christmas trees which will gleam until Saturday in the big windows of the poshest houses in our cities and towns are saying one thing: we’re sorted.
We have a lovely home. We have enough money to buy a tree and lights and run electricity though them. We have enough health and mental stability to get them all up in time. Don’t mess with us.
Every year I think how wrong this is. I briefly consider inviting a family of refugees to Christmas dinner. I have a brainstorm and think none of us should own shelter because shelter is a basic human right.
Then I counter that idea with the thought that my pride in my home and the comfort of my family are not wrong in themselves.
What’s wrong is that the benefits I enjoy are not shared. The way to do that is a property tax which captures some of the value of my home and shares it. A tax which shares some of the investment of the wider society in my home.
Site Value Tax is the tax. Site Value Tax is calculated on the value of the site on which your home is sitting.
That site’s value depends largely on its location. Does it have a beach nearby, does it have a good primary school within walking distance and an easy bus ride to a good community school, are there shops and industries offering amenities and jobs nearby?
A huge amount of taxpayers’ money has gone into creating highly-resourced sites. My feelings of guilt about owning a home with a garden in south Dublin because I was in the right place at the right time are justified: you, the taxpayer, fund and maintain the site.
This home is the gift that keeps on giving: I pay no rents for college-going kids and if I have to, I can rent a room out tax-free; I can swap the home and go on holidays; I can borrow off its value; it will fund my dotage; if my dotage is (tragically) cut short, it may even fund my kids’ first rung on the accursed property ladder.
It is disgraceful that any family can luck out to that degree while 8,800 people are homeless in our State, including 3,300 children in emergency accommodation.
The advantages of a Site Value Tax over a basic property tax are many. The most obvious advantage is that development and improvement are encouraged, not discouraged.
You pay the same charge on a serviced site as on a home on a serviced site, so if you have a serviced site, you are likely to develop it.
If you build an extension and retro-fit your home to high environmental standards your home is worth more but your SVT stays the same.
That’s the way to go, because you have added to the sustainable housing stock from your own back pocket and provided jobs as well.
TCD economist Ronan Lyons makes the point that we only have three possible sources of tax: income, goods and services, and wealth.
Ireland is one of the countries with the highest tax take from the first two sources and while taxes on income harms competitiveness, taxes on consumption hit the poor hardest.
Taxing wealth properly is what Ireland doesn’t do. This results in higher taxes in income, goods and services which harm our economy and builds inequality.
Our abject failure to properly consider SVT is the more shocking when you consider it’s been in two programmes for government.
The Fianna Fáil/Green programme introduced it and the Fine Gael/Labour programme kept it in theirs.
The excuses made for not proceeding with SVT included the arguments that people wouldn’t understand it, that valuations were too hard to come by, that it had never been done before, that it was unfair.
NUI Galway’s Whitaker Institute is currently studying why we rejected SVT and introduced the Local Property Tax instead.
Lyons argued at the time that we had an opportunity not to repeat the mistakes made in other similar economies, which makes sense when you hear the excuse that our crisis is not as bad as the crises in other appallingly-run housing markets, like the UK’s.
Denmark and Estonia have been using SVT for decades. The valuations should be easier to make than the valuations on individual properties because swathes of sites can be valued together.
Fairness can be factored in, as with any system of taxation. Each person can be given a ‘green space’ tax credit, for instance. An elderly person on a large site — such as me in my dotage — can pay after death by means of a lien on the property.
Most commentators would reckon an SVT might be paid at about two per cent of the site value, minus deductions for each person living on it.
However some years ago, when the recession allowed space for revolutionary ideas, Lyons suggested a 10% SVT on residential and commercial property, to bring in some €10 billion annually and allow for a reduction in income and consumption taxes.
The housing agencies reckon we need somewhere between 20,000 and 50,000 new builds a year to solve the accommodation problem. The €200,000 it costs on average to build a local authority house goes into €10bn 50,000 times.
Of course, we need infrastructure and there’s a planning process and a skills shortage but you get the idea: we have a crisis and we need a big idea to fix it.
Instead all we get from our politicians is buck-passing. It is grotesque to see local councillors voting to decrease the Local Property Tax whenever there’s a bit of steam in the market: three out of four Dublin councils voted to reduce from the baseline tax by 15% while Fingal, faced with an €8 million deficit, increased the tax by five per cent, half of the previous year’s 10% cut.
Galway’s councillors scrambled to overturn the retention of a 10% rise. Cork, to its credit, has neither reduced nor increased and Kerry has just approved a five per cent rise.
Valuations have already been delayed by three years and our Taoiseach Leo Varadkar was heard last year placating residents in his Dublin constituency with the suggestion that councils should be allowed to vary their charges further downwards.
Meanwhile on our so-called left-wing, Republican Party, Sinn Féin, wants to abolish the charge and Solidarity PBP wants to replace it with — wait for it — a “Landlord’s Tax”. We are our own landlords now.
We need an idea as revolutionary as the Land Acts which redistributed land from wealthy land owners to landless tenants at the end of the 19th and beginning of the 20th century, to redistribute from home-owners to those who don’t own a home.
We need to remember that our Republic was built after we fought for some measure of equality when it came to land ownership — and won.