A Tax On All Your Houses!
Colm O’Hare reports on the thorny issue of the Government’s new ‘household charge’...
Colm O Hare, 17 Jan 2012
You may be in negative equity and struggling to pay a boom-time mortgage for your shoe-box apartment or three-bed semi deep in Commuterville, not to mention having to cope with a whole raft of stealth taxes, including recently introduced VAT and bus fare increases. Brace yourself, then, for some more financial pain!
You have just over two months to register for, and pay, the Household Charge – yet another government wheeze, designed to extract more wedge from your fast-dwindling pay-packet. An interim measure before a fully-fledged valuation-based property tax is introduced in 2013, the Household Charge is set at a flat fee of €100 for everyone who is liable to pay. In other words, it is a fundamentally inequitable tax, hitting all income brackets (and house sizes) for the same amount.
According to a spokesperson for the Minister of the Environment Community and Local Government, Phil Hogan TD, “the Government is committed to the introduction of a property tax for 2012 under the EU/IMF Programme of Financial Support for Ireland.” It’s all part of the bailout deal, in other words.
Apparently, we are one of the last countries in Europe that doesn’t fund local services through local property-based charges. So the Household Charge is payable by every household in the country to help fund the local services they enjoy – right? Wrong! It’s a property tax, pure and simple, payable by the owners of a residential property – whether they live in them or not. Even someone who has emigrated to find work and who has let out their home will be liable, while tenants in rented accommodation are not liable – even though they make use of local services, including water, parks, libraries and so on.
There are exemptions for some other categories such as those living in social housing, some ghost estates and anyone in receipt of mortgage income supplement, but if you own a property, the likelihood is that you’ll have to pay!
Will it be accepted by the majority of the populace or will it go the way of the Residential Property Tax, which was abandoned in the 1990’s following huge opposition and heavy lobbying? It’s too early to say but according to Paul McSweeney, CEO of the Local Government Management Agency, the body tasked with collecting the Household Charge, over 23,000 property owners have already registered and paid the charge in full. “That was in the first week of January after the Christmas holidays which, when you think about it, is phenomenal,” he says. “People have until 31st of March to register and pay, though if they want to pay by Direct Debit in four installments of €25, they have until the 1st of March to set it up. There will be an advertising campaign in the coming months informing people how to go about paying.”
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