Property tax at advanced stage

The International Monetary Fund has called for the property tax on the family home due to come in next year to be introduced at a “suitably high level”.  Cabinet meetings are due to restart on 4 September and it is likely that the assessment method and the level of the tax will be decided at one of the first few meetings.

A report for Environment Minister Phil Hogan on the issue was drawn up by an “expert group” led by former top civil servant Don Thornhill and presented in June.  The fact that the Minister has decided to keep its contents secret for three months is probably a sign that the proposals have the potential to be extremely unpopular.

The Government has promised the Troika that it will raise €1.25 billion euro in fresh tax revenue next year.  It has promised the electorate that there will be no increases in income tax rates.  These figures also indicate that the property tax may be introduced at a comparatively high level, perhaps an average of 400+ euro or four times the rate of the Household Tax.

At its last Cabinet meeting before breaking for August the Cabinet decided to take the control over collecting the property tax from the Local Government Management Agency (LGMA) and the local councils and give it to the Revenue Commissioners.  This underlines the importance of non-payers holding firm and refusing to register.  The Revenue Commissioners will be no better placed than the Councils to pursue the property tax if they do not have a full register of homeowners.

It also represents an admission by the government that the LGMA and the councils have failed in collecting the household tax from an embittered population.  It is also a sign that the establishment intend to “get tough” with the home taxes nonpayment movement following their failure to win round one.