A Tax On All Your Houses!

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.”
Joe Higgins, Socialist Party TD for Dublin West, is to the fore in the campaign against both the Household Charge and any other utility taxes such as water charges. “I think that there is going to be a mass revolt by the people against this tax,” he told Hot Press. “This is the first opportunity people have had to take a stand on an aspect of the austerity that has been imposed on the ordinary people to pay for the gambling debts of bankers and speculators. Up until now, people didn’t have a choice, as income taxes and VAT are taken off at source. But now they have a choice and we’re asking them to boycott this tax.”
While the flat fee is clearly weighted against those on lower incomes, the valuation-based property tax which is planned would presumably hit wealthier people in their so-called “trophy homes”. Would the Socialist Party support this?
“Ordinary family homes became monstrously expensive during the boom and even very modest homes will be hit severely by this unfair tax,” Higgins counters. “Everyone knows that that this charge will quickly become a home tax and a water tax and in a few years time it’ll be €1,000 or more, for even modest homes. We’re asking people to take a stand now. Our campaign is intensifying and there will be events and meetings organised in every local authority area in the country over the coming weeks and months.”
This one will run and run.