Dublin Chamber sent out an email yesterday with their opinion on introducing a property tax which we wholeheartedly agree with, a National Tax system will simply gouge some while subsidizing others and it belies the facts of costs which must be considered in delivering the services this tax is there to cover.
(from this point on it’s their release)
The Government’s plans for a property tax will fail unless it is applied locally, says the Dublin Chamber. The Dublin Chamber supports the introduction of a value-based property tax but believes that such a tax should ensure that the value of a property is set against local norms.
“The principle we set out in our submission on property tax was aimed at achieving regional fairness,” said Gina Quin, Dublin Chamber Chief Executive. “In doing so, the Government could ensure higher bills for those with bigger or higher valued sites so that neither urban nor rural households are unfairly targeted through a national system.”
“Location is a key component to a property and the government could see history repeat itself if they do not take it into consideration,” said Ms Quin. Between 1983 and 1997, Ireland had a residential property tax where the tax was 1.5% of the home’s value above a market value limit which in effect made it a ‘Dublin tax’. The Department of Finance’s pre-Budget 2011 review of the taxation of property concluded that “any tax based solely on valuations would probably be higher in the Dublin area and, to a lesser extent, other urban areas, so the tax could be open to similar criticisms to the old residential property tax.”
Under the Dublin Chamber’s proposal each local authority would record the house values for the area. Those homes with the highest value for the local authority area would pay the highest and those with the lowest value would pay the lowest. Including a local component to a property tax is quite common. For example, Irish commercial properties are valued at a national level by the Valuation Office but the rate is set locally by the local authority as voted by locally elected councillors. In England, a national system of tax bands is used but the tax rates are then set locally.
Ms Quin concluded, “The creation of an annual property tax could be a significant step towards creating a sustainable local government system. The property tax must be used to fund local government, as outlined in the IMF/EU Memorandum of Understanding. So while collection through a national body, such as the Revenue Commissioners, makes sense for administrative ease, the funds should go directly to the local authority for which the property tax was paid. Local authorities and councillors would be directly accountable to local taxpayers for what is collected and how it is spent. As we fix the systems of the past, we must ensure that democratic accountability is part of the formula.”