Property tax now a charge on living in Dublin - Labour TD
THE controversial property tax has been branded a "charge for Dubliners" by a prominent Labour Party TD.
Former Junior Minister Joe Costello yesterday called on the Government to address the divide between what homeowners pay in the capital and rural Ireland.
Mr Costello also insisted all property tax collected in Dublin should be spent by local authorities in the capital and not used to make up funding shortfalls in rural county councils.
"Whatever taxes are collected should go to local services so people see where it is going," he told the Herald.
"We have to address what is being paid by people in Dublin. The way it is now it is not a property tax or a local tax - it is a Dublin tax and there are a lot of areas where people can't afford it. House values in Dublin intend to lead the way by a mile.
"It wasn't an issue when it was first introduced because property values were rock bottom but now it's rapidly becoming a problem," he added.
The Local Property Tax (LPT) is based on house value, meaning homeowners in Dublin pay more due to the higher cost of property.
With house prices increasing in Dublin, homeowners fear they will be hit with huge tax hikes when the current freeze on the charge ends next year.
The tax is becoming a divisive issue in both the Labour Party and Fine Gael as a general election nears.
At Fine Gael's parliamentary party on Tuesday night, a number of TDs raised issues about the tax with Finance Minister Michael Noonan who addressed the membership ahead of his 'spring statement' on the country's finances
Dublin North TD Alan Farrell called for certainty on what people will have to pay when the current freeze ends.
Mayo TD and Taoiseach Enda Kenny's constituency colleague Michelle Mulherin put a motion before the parliamentary party calling for property tax to be linked to inflation.
Ms Mulherin wants future charges linked to the average rate of inflation over three years and based on the current self-assessment property taxes rates. She said the property tax should only be changed every three years.
"There are fundamental problems with our property tax model and I have been raising my concerns since before property tax was introduced in the first place.
"The difficulty lies in the manner a property owner's liability is calculated which is too simplistically linked with the market value of the property and affected by the often extreme fluctuations in the market which we are witnessing in some areas in particular," Ms Mulherin told the Herald.
Her motion was not voted on but Minister Noonan agreed to consider the Mayo TD's view as part of a consultation process examining the property tax problem ahead of the next budget.
Meath TD Ray Butler asked the minister to introduce a housing grant for first-time buyers to stimulate construction.