Families will face double whammy over water and property charges
NEW BLOW: Anger as householders must pay up to plug gap in Government finances
Middle-income families are facing a double whammy of taxes on their homes: a flat rate for households and another for water facilities to plug the gap in Government finances.
The new "interim household charge", a precursor to the property tax, will be introduced from the beginning of next year, Minister for the Environment Phil Hogan has confirmed.
The charge will be introduced on a "flat-rate basis", meaning all households will pay exactly the same until the permanent system is introduced.
And the Government said that it will roll out water meters from next year with incentives for those who cut back on usage.
But until the meters are in place, all households will have to pay an annual fee for the next two years.
Families will have to pay an estimated fee of €175 a year, instead of being billed on the basis of use.
Sceptics have expressed concern about the creation of a new "semi-State monster", Irish Water, which will drain even more money from struggling families.
Professor Richard Tol of the Economic and Social Research Institute said metering would be unpopular.
"To create a new semi-State monster at a time when discussions are going on about privatising ESB and Bord Gais, and hopefully CIE, is very ironic," he said.
Minister Phil Hogan said that the Government was obliged to bring in the household charge and water charge under the EU/IMF agreement.
But he said that he did not see water metering as a "charging or taxation issue", as it costs €1bn a year for water treatment each year.
"I see it as a very important water-conservation issue where there's a substantial amount of money being wasted through poor pipe networks but, equally, through individuals and businesses not engaging in water conservation to the extent that they should," he said.
"There are too many people wasting water at the moment."
Minister Hogan outlined that the money collected would be "ring-fenced" for local Government services, such as fire- fighting, libraries and other amenities.
The Government said that calculating the new property tax with a site valuation for each home is not sufficiently advanced and this was why it had to introduce a standard charge.
But families on very low incomes, those on social welfare and those who are struggling with paying mortgages may be exempt from the fees.
There is no indication of how much this might amount to, but the previous Fianna Fail-led government initially planned to introduce a charge of €100 per annum next year, with a value-based addition being introduced in 2013.
If that figure was levied on the State's 1.8 million households, up to €180m could be raised in a year.