herald

Thursday 30 October 2014

How this crippling new homes levy will hit Dubliners 3 times as hard

DUBLINERS face having to pay almost three times as much property tax as householders outside the capital. The controversial tax is due to be rolled out across the board this summer at a 0.18pc rate of the value of the property.



But the discrepancies between how much householders in the capital will have to pay compared to people living in towns and cities elsewhere suggests the tax may be one of the most divisive ever.

Today the Herald highlights the disparity between the charge on homes in Dublin and two medium-sized towns, close to Cork and Galway cities.

We have selected three types of houses - a four-bed detached, a three-bed semi-detached and a three-bed terraced - for comparison purposes. The big difference between the houses in each type is their location and price.



Unfair

Homeowners are due to receive an estimate on their bill from the Revenue in March.

They must submit their valuation by May 28 and this will determine the rate for the next three years.

The disparity between what residents of Dublin and elsewhere will pay has already caused a rift in Fine Gael.

Olivia Mitchell is one of those TDs who has railed against the calculation method.

The Dublin South TD said the tax is grossly unfair on those living in the capital.

"I am hoping that Minister Phil Hogan will realise that the situation as it applies to Dublin is really unfair," she told the Herald.

"Yes, houses are dearer here but I want for us to pay for what we get in Dublin and not services in other parts of the country.

"I would like to see that the big houses will pay more than smaller houses right across the country but that everyone only pays for the services that are provided in your area. It is a local tax and it should remain a local tax."

Ms Mitchell admits that it is unlikely that there will be any change at this stage, but hoped there would be next year.

Michael Kitt, Fianna Fail TD for Galway East, agreed the current property tax system was unfair. However, he described it as "utter hypocrisy" for a Government backbencher to voice concerns at this late stage.

"I think it is utter hypocrisy to be raising this issue now when we were guillotined from discussing the matter properly in the Dail and were only given a few hours to discuss the matter.

"I believe she's right in that it is unfair and people in the east are getting hit harder.

"But it will be a huge hit to families all over the country who are already struggling to pay mortgages and bills. This will be hard on families, no matter where they are," he added.

Environment Minister Phil Hogan agrees there is an imbalance in the way in which the tax will be levied.He compared the property levy to motor tax, explaining that the vast majority of motor vehicles are on the east coast, but these help pay for roads throughout the country.

"Obviously the monies that come in through the motor tax, or the property tax, are predominantly going to be coming from the east coast of Ireland and major urban areas," he said.







Perverse

As the issue continues to build steam, the Dublin Chamber of Commerce have come up with a table based on property website Daft's asking prices to highlight the significant differences around the country.

Director of policy Aebhric McGibney said the tax is "inherently unfair" and that many people are living in the capital out of necessity rather than by choice.

"Two people who have exactly the same type of house will pay a vastly different type of tax depending on where they live," he said.

"Someone in north County Dublin could pay €400 but then someone in Carlow or Mayo will pay just €90. A lot of people don't have a choice, they pay a lot more of their salary to have the privilege of being near to their job.

"It seems perverse to provide an incentive to people to live further away from their job. The property tax as structured could create the urban sprawl in the Dublin area in rural areas," he added.

hnews@herald.ie

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