Household Charge / Property Tax

Monday, September 24, 2012

Here is the extract on property tax from page 66 of the Fine Gael general election manifesto 2011.

Below it is the relevant extract from the Labour Party manifesto.

Funding Local Government: Fianna Fail’s proposal, now endorsed by the Labour Party, to introduce by 2014 an annual, recurring residential property tax on the family home is unfair. But as we tackle the fiscal crisis, we will have to cut central exchequer funding for local authorities, and we recognise that local authorities will have to find more sustainable sources of revenue appropriate to local circumstances. What will be viewed as fair in South Dublin might be viewed as unworkable in rural Clare.

In this context, we will empower local authorities to put in place, following the 2014 local elections, fairer alternatives to Fianna Fail’s and Labour’s recurring annual tax on the family home. The options would include:

• No extra local taxes, forcing local authorities to close non-priority services and / or to deliver increased efficiencies;

• Increased local user charges for waste etc.; or

• The option of a local “site sale profits tax”. Such a tax would be levied on the profit made from the site value on the sale of a residence (sales proceeds, less cost indexed by inflation, less stamp duty paid and less home improvements)

The final measure might be considered as both fairer and more economically sensible than an annual recurring property tax. Whichever option local electorates choose, for the first time since the 1970s local government will have real independence from central government in deciding what services to provide at local level and how to fund them.

Extract from the Labour Party Manifesto:

Labour accepts that it will be necessary to introduce a site value charge, in order to prevent higher taxes on work. The Government has not, however, carried out sufficient work to allow such a charge to be introduced in the short-term. 

Further detailed study will be required to devise a fair basis for such a charge that takes account of the value of property in different regions, the need to exempt some categories of homeowners, and the need to take account of those who have recently paid large sums in stamp duty or who are in negative equity Any charge of this sort, therefore, cannot be set in place before 2014. 

Accordingly, Labour will publish a Green Paper by the end of 2012 on how the charge can be structured in a fair and efficient manner. As an interim measure, Labour will increase the second homes levy by
€300 to yield €95 million.

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