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When the virus hit, public services were our frontline defence. Not only the ambulance staff providing direct care, but the homeless services keeping people off the streets.
Yet a majority on Dublin City Council seem to have taken a different lesson from 2020 and prioritised tax cuts above public services.
By a margin of 34 to 21, councillors voted last night to once again cut the local property tax (LPT) by 15%, denying local services an extra €12 million over the next year. This is the maximum cut councils are legally allowed to make.
A tax cut for the rich
Don’t get me wrong. The local property tax is far from perfect and there are plenty of good reforms that should be made.
Low-income exemptions should be widened, money collected locally should stay local, and homes built after 2013 should be included (they currently don’t pay tax, due to an ongoing artificial delay in valuations). More broadly, some argue it should be replaced with a different form of property tax.
But critiques of how the tax is set up shouldn’t mask what the vote to lower the rate was: something of little-to-no value for the vast majority of Dubliners, and a tax cut worth thousands to those in the most expensive houses in the city.
Just look at who benefits from this 15% tax cut. People in council housing get nothing. Most renters won’t see the cut passed on to them by their landlord, so they too mostly get nothing.
Around a quarter of homeowners in Dublin will save only €14 a year as a result of the tax cut. In fact, a majority of homeowners will save less than €47 a year. This is less than a euro a week.
Meanwhile, those who are in houses worth millions can expect savings worth over a thousand euro each year, thanks to Dublin city councillors’ vote last night.
This is exactly the sort of outcome you get when you cut a tax like the LPT: a pittance or nothing for low- or medium-income households, and a windfall for the very richest.
This impact is backed up by evidence. Figures from the Revenue Commissioners show the top income group paying more in LPT than the bottom three income groups combined.
Tax cuts make for service cuts
Even setting that aside, it seems a bad year to prioritise tax cuts above all else.
In the council’s budget are the city’s ambulance service, the Dublin Fire Brigade, and many of the homelessness services the city relies on. It also includes the things we need to make the city more liveable during Covid-19 – cleaner streets, better public spaces, libraries and supports for business.
These services are now likely to be in the firing line in the city budget. Our capital is facing a widening deficit of nearly €40 million next year. By law, local authorities have to balance their budget each year. We don’t have the independent power to borrow, nor can we run a deficit.
In other years, council budgets might look to make up the gap with other sources of income: we could increase business rates, parking charges, tolls and so on. But Covid has made those options either impossible or untenable.
Yes, the council will seek greater efficiencies and try to protect the most important services.
Yes, central government should be providing extra supports and funding to hard-pressed local authorities.
But it is clear that services will likely face cuts in the coming year, at a time when they are most valuable.
On this tax, most of Dublin city’s councillors missed the opportunity to protect our city’s services. Those who depend on the services will pay the price.
Every single year so far, Dublin City Council has cut the LPT to the maximum extent possible.
If there was one year where that should change, 2020 should have been it. It’s a year for more public services and more solidarity – not just tax cuts.
Michael Pidgeon is a councillor for Dublin’s South West Inner City, which includes the Liberties, Rialto, Kilmainham and Inchicore. He is the Green group leader on Dublin City Council.
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So you are wealthy now if you own a house?
@eoin carroll: did you read the article? He spells out exactly how it’s mostly people in houses which cost millions who will make any significant savings.
@Karl Harvey: I’m not wealthy and I’ll make a saving…
@Canyon: but is it a significant saving? He says most will save €47 a year, which is less than €1 a week.
@eoin carroll: for sure!!
@Karl Harvey: i pay about 20€ per month, would probably not notice any reduction as it goes off pay check
@Karl Harvey: no it won’t as the lower value houses are exempt from property tax. As is social housing .. so no it won’t. Paying tax on income already taxed, paying tax on property that has already paid over a 1/3 of its building cost in tax is wrong.. however if they were honest and said we all had to pay the rates of old , which is what property tax effectively is then all should pay according to their income or area they live in.. like other countries.. that’d collect more tax fir their coffers .
@eoin carroll: yes and €14 -€47 per annum is a massive windfall for the wealthy. Council tenantsvget no benefit perhaps because they don’t pay LPT and most don’t even pay their rent. It’s all so unjust!
@Karl Harvey: maybe their mortgages are also millions? LPT should be based on equity not cost
@Patricia O’Reilly: I didn’t bother reading your comment as your opening sentence is incorrect, lower valued properties are NOT exempt from Local Property Tax. “The Local Property Tax is based on market value bands. The first band covers all properties worth up to €100,000. Bands then go up in multiples of €50,000.”
@Karl Harvey: Very true, but then he didn’t write an opinion piece about all the other aspects of the LPT that he acknowledges are wrong. The government(past and present) set about turning people’s homes into assets to suit the tax agenda. I don’t disagree with a property tax but it should be fair since it’s a nationally applied one.
So people in council houses get nothing? Other than a free gaff to live in?
@Lisa Jones: How is it a free gaff if you’re paying rent? Do landlords not get a free gaff when their tenants pay off their mortgage for them?
@Karl Harvey: 20 a week is hardly rent
@Gerrard: absolutely nobody is paying €20 a week, at least in Dublin, the minimum amount is higher than that. Also only people who are unemployed pay the minimum. There are plenty of people in social housing working.
@Karl Harvey: well that’s a warped view of how property investment works.
Do you not realise that the renter enjoys the use of the property they pay for?
You seem to think they should get it for free. Do you say the same about the supermarket when you do your shopping because in your warped, strange and crazy little mind you’re giving them your money for nothing every time you shop. Sure they should just give food to you for free!
@Joe: A house is an investment that the landlord gets to keep afterwards. Once I eat food, it’s used and can’t be enjoyed again or sold on. I’m saying landlords aren’t benevolent people renting out properly for the good of their health. They are getting a piece of properly effectively for free, with profit on top most times. You can’t tell me being a landlord for most isn’t profitable.
So why do people in social housing get abuse for paying reasonable rent for their home, and landlords who are charging shocking rents to get a free home to profit from, aren’t given any grief?
@Karl Harvey: A subsidized rent, not like rents in the private rental market, how can someone expect to benefit from a Tax cut on a tax they don’t pay.
@Karl Harvey: ‘landlords arent given grief’ you must not be on the comments section here to often. Essentially your saying people that make investments should receive grief like they are being gifted something for nothing. Investments that they will have had to work for to put them in that position. Doesnt always work out anyway. Didnt for me anyway. I’d never get I involved in property again from my experience anyway.
@Joe Farrelly: I don’t think people in council housing should benefit directly from this tax cut. I think the tax cut shouldn’t exist, because it only benefits people in homes worth millions, and takes away money from public services which we can all benefit from and are already underfunded. Also the rent in the private rental sector is subsidised often with HAP.
@Karl Harvey: most pay no rent and none pay market rent
@Karl Harvey: paying 15% of your income (as low as 30 a week) to live in Dublin City is not “reasonable rent”. That amount wouldn’t even cover the management fees for my 1 bed apartment. Social housing shouldn’t need to be subsidised by tax payers just because tenants don’t even pay enough to cover the maintenance of their properties
@Karl Harvey: “Once I eat food, it’s used and can’t be enjoyed again” – well there are certain web sites….erm, never mind.
@Lisa Jones: that’s bull no one in any local authority houses get them for nothing,
@Karl Harvey: you really don’t get it do you! How is it free? They can’t use it for other purposes when it is rented out. They pay interest on any loan they take out to cover the i initial cost, this is a significant amount of money. They miss out on other investments when their money is tied up in property.
It’s not free and your concept of free is warped to say the least!
@Lisa Jones: It is paid as part of the rent, yes rent is paid to the landlord Dublin City Council.
@Gerrard: If you can find a DCC place a €20 a week, fait play to you. It is means tested.
@Joe Farrelly: It is paid in the rent.
@Karl Harvey: I agree on the HAP but most people renting in the Private Rental world are paying their own rent. I pay LPT and I am only interested in how much I have to pay not what other people have to pay, if it’s less than last year great.
@Joe: I had an interesting conversation with a landlord on here sometime ago. He was complaining about tenants in one of his properties looking for a rent reduction as they’d received a pay cut. He’d bought a few houses, one each for his children and another two he hoped to sell at a profit for his pension. He basically expected his tenants to not only pay for houses for his children but also his pension. He totally missed the point that everyone has to pay for their own pension while he expected his tenants to pay for his.
@EillieEs: tenants paying for their rent…..his investment…..much like any pension fund may buy properties that are rented out. I dont see how this is in any way questionable. If I made the kind of money it takes to do this I would certainly be doing it too.
@Karl Harvey: in dublin the tenants owe €35 million in unpaid rent
Yeah like the system doesn’t suit the working class. House paid for by the tax payer
@O Lusaigh Sean: when tenants pay off their landlords mortgage for them, is that not having your house paid for by the tax payer?
@Karl Harvey: no. Go and get an education. Clearly you’re thîck!
@Karl Harvey: No its having their mortgage paid for by A taxpayer, not the proverbial “THE” taxpayer.
@Karl Harvey: No it’s not, a landlord would have had to pay the deposit on the property and a lot of people buy investment properties in cash, and unless it was a very cheap house it’ll take a long time for them to earn back the money they paid for the house.
@NotMyIreland: so it’s all grand that thousands of taxpayers are being wrung dry for the landlords investment and profit, once it’s not you?
@O Lusaigh Sean:
Not many people live in social housing in Ireland. Most of the working class are living in private rentals with a landlord breathing down their neck, worrying about being evicted next week.
Let’s do something for them first IMO.
@Sam Harms: it’s a long term investment. They will receive that initial investment back along with the house paid off and then profit on top, due to the sky high rents. All they have to do is pay the initial deposit, which as you’ve said they pay in cash, so clearly they’re not strapped for money. Landlords aren’t stupid. They wouldn’t be in the game if it wasn’t profitable, I don’t know why you’re trying to act like it isn’t.
@Karl Harvey: you can warp it anyway you like but it won’t change reality. You pay for a service and receive it. A landlords takes a risk to invest and works to make sure the tenant has what they pay for. So there are ongoing expenses such as roof, boiler, appliances, widows etc… that the tenant gets as part of the service they get.
To say social housing is a reasonable rent is strange as it is subsidised to be cheap not reasonable but cheap. As large quantities of social housing was sold to residents they then get a discounted property on top. It is a handout. People are annoyed by this when they see people paying cheap rent and spending money on luxuries they can’t afford. That will seem unfair to many.
@Karl Harvey: no they are paying for the use of an asset and private landlords usually pay 52 percent tax on rental income which might explain high rents. The state gets more of the income than the landlord who also has to pay, property tax, LPT and maintenance costs as well as insurance property management fees and bank interest
If it’s so good why are all private landlords selling up and why don’t you become one?
@O Lusaigh Sean: like yourself sorry u don’t work, so u are not working class
@Joe: u should educated yourself
@Karl Harvey: I never said it wasn’t profitable just pointing out that it would take a long time of renting to make back what they have paid. It’s also not quaranteed that they will get their investment back if house prices drop. And like someone else said they pay 52% tax on any rental profit if they are above the lower tax band. Would you like them all to sell their rental properties and leave thousands of people with nowhere to live?
@Sam Harms: you don’t pay tax just on profit as a landlord you pay it on all rent with some deductions allowed. You also pay PRSI on it
@Karl Harvey: what are “taxpayers” by the way? Only the ones you consider to be taxpayers. Landlords are taxpayers as well you know!
@Karl Harvey: Karl, sorry but if the world were organised the way you seem to think it should be organised there would be no investment, no progress or advancement in technology or medicine etc. Sorry but your socialist views have failed the test time and time again. Landlords like investors have saved, worked hard and provided the possibility for others to access accommodation when they did. It have the means to buy their own house. Yes, in some cases they also reap the benefits. Of there were no landlords and if we were to wait on the State to provide sufficient housing there will be many more homeless people
@Karl Harvey: brilliant, excellent, fantastic. I am still laughing
Wow! There’s somebody who definitely won’t be getting my vote the next time.
No menton of the fact that council tenants and renters benefit from the already considerable tax burden levied on these “wealthy” people to fund the local amenities that they all use!
Council tenants benefit all of the time, they live on “benefits” aka other people’s money!
I don’t have a problem contributing, but it makes you want to contribute less when all you hear is moaning!
Sick of hearing about how badly off people who don’t contribute or contribute very little have it!
@Joe: this article is talking about public services we all can benefit from. Everyone who is living in a house that doesn’t cost millions is losing out from this tax cut. The real enemy is above you, not below you.
@Joe: Crazy how you heard none of that in an article that wasn’t about any of those points. Get a grip smh
@Karl Harvey: joes a troll
@Karl Harvey: not really, 41% of annual spending in Dublin City is on housing, i.e. social housing, homeless services etc. The majority is spent on things that don’t benefit the average person
@Darren McEneaney: how was the article about none of that? In summary that article is giving out that “wealthy people” aren’t paying more tax.
A tax which is used to fund the housing of the very people who benefit most from it but don’t pay said tax.
A tax from which all people including those who don’t pay it as it contributes to maintenance of local areas and investment in facilities.
That’s exactly what the article is about!
@Karl Harvey: yes and why should the people who contribute most in taxes be expected to contribute more while others who benefit more form the services being funded contribute nothing?
Property tax should be abolished
@Sandra Roe Sheridan: What would you replace it with?
Our property tax was previously abolished by Bertie Ahern’s Fianna Fail and PD government in 1997. It led to a chronic underfunding of and mismanagement of funding for local government.
@Sandra Roe Sheridan: Why? It is a wealth tax. Most left leaning parties in Europe favour a property tax. Only populist parties here want rid of LPT. Where would the dublin city council get €68m from if not from LPT?
@DaveevaD: Not really. It was the abolition of rates in 1977 by FF that did local authorities in. Property taxes in the 1990s were a joke.
@Fionn Darland:
Not sure it’s a wealth tax
E.g If someone owes the bank 90% of the house value and of course already has been taxed on the 10%, and is taxed for a debt .
If it’s a wealth tax surely it could only tax the 10% the victim actually owns.
Typical green party, tax everything…
@Neil Farrell: apart from the fact that the Local Property tax was reintroduced in 2013 when Fine Gael & Labour were in power.
Ireland previously had a property tax but Fianna Fail and the Progressive Democrats abolished. In typical Bertie Ahern style there was never a coherent plan for how Local Government will be properly funded when that tax and other charges were abolished.
@Neil Farrell: ?????? I don’t understand your comment! a tax was reduced
@Lorraine Mac Rory: Yes, but if you read the article he wants it increased…
@DaveevaD: “Ireland previously had a property tax but FF abs the PDs abolished it”. Are you referring to the hated rates which were abolished by FF in 1977 if memory serves me?
@John R: Fianna Fail abolished rates in 1977 and then abolished property tax in 1997. the tax had high property value exemption limit and an income exemption limit so it only applied to a small section of the population.
@John R: there was also the Residential Property Tax that was introduced in ‘83 and abolished in ‘97. It was hugely unpopular as it was basically a Dublin tax. It only applied to properties over a certain value and there were income limits too (can’t remember the figures now). There was huge non-compliance because as house prices increased wages didn’t and a lot of people could ill afford to pay.
@DaveevaD: rate on private houses were abolished in 1977 long before Bertie and the Progressive Democrats. The property tax as is simply restores the inequity in the old rates system……no account taken of ability to pay and heavily discriminatory against Dublin and some other urban areas.
@Neil Farrell: Surely its fairer to keep taxes on property speculation instead of increasing VAT or Income tax on PAYE workers. The money for services has to come from somewhere. A lot of the super-wealthy in Ireland have their money in property.
Get rid of the Greens/ FF/ Labour and Soc. Dems who all voted to increase LPT on hard pressed home owners. I’m a pensioner who struggled through the hard times to buy my own house , while people living in local authority housing and some with a number of salaries coming in PAY NOTHING. Wrong and Unfair.
Typical Green Party want everyone back to the stone age,
Richard Boyd Barrett was campaigning for the abolition of LPT as recently last week.
@Eric: SF want rid of it also. Imagine left leaning parties trying to get rid of wealth taxes. Only in Ireland!
@Fionn Darland: The last time the property tax in Ireland was abolished it was done by Bertie’s Fianna Fail with back up from PDs.
We’re in an alternative universe now where Irish left wing parties are voting in Dublin City Council alongside Fianna Fail to support a policy position pushed through by Bertie Ahern
That fella is for the birds
So tax the wealthy
@john: Ireland already has the most progressive tax system in the OECD.
ah I see now, so because you have an expensive house you shouldn’t get any relief on property tax according to the Greens. where as the Left wing parties want all to get some relief.
If we ALL use these services , then the onus is for us ALL to pay for them equally (% of paycheck) . If taxes need to go up , then so be it. But making people pay more than others because a piece of turf dictated so – seems lunacy.
Disgusting tax imposed my FG and Labour! Remember that!!! And only the people revolted we’d have a water tax too
@Shinners Abú: Next thing you know “left wing” SF will be opposing a wealth tax. Every other democracy has some form of property and water “tax”. One can argue with the amount and the system. It’s hard to argue with the rationale. And these taxes are universally supported by left wing parties. Except in Ireland. In Ireland SF and their fellow travellers would like to tax the pants off everyone earning above a limited wage and redistribute the money to those that vote for them. Mad party.
I would agree that LPT needs an overhaul, but you need to ask if its necessary to begin with. Neither LPT nor Water charges were seen to be popular, especially the austerity years when they came in effectively to make Joe soap pay for the bankers mistakes. That’s what LPT in particular has always felt like, and why it needs to go altogether. You don’t see your hard earned money being spent well by the councils or their services. The bills for the binmen already have been paid, and same with electricity, phone bills, TV licence and internet. And the less said about the incompetence at every turn for the past 5 years that is Irish Water, the better. You don’t see much for what you put into it is my point, especially since many of the places mentioned here are shut or on skeleton crews due to the virus.
Council tenants already get a 100 per cent cut in property tax. The vast majority of property tax payers in Dublin not rich . They pay a lot more property tax than people living in my bigger houses in so called rural Ireland. High time anyway DCC live within their budget. DCC wants bigger and bigger budgets while actually doing less and less….almost all services are contracted out. Well done city councillors !
My ex-local authority house is currently worth half what I paid for it during the Celtic Tiger. It cost me a shedload of money and my health and I can’t afford to do anything to improve it. Wealthy? I don’t think so. I can barely afford the Property Tax at the current rate. Please don’t generalise. I expect better reporting than this.
It appears whatever politicians do will be criticised , Cavan County Council voted to Increase the LPT by 15%, they are lambasted.
Dublin City Council vote to reduce it, They are also Criticised , – what is the answer??.
@Eugene Comaskey: Leave it as is
Let’s get rid of Michael Pidgeon and his like who want to tax the poor.
@Paul Howard: u a cuckoo
I feel like someone has just explained what a percentage means to me.
No hard figures, no bracketed values, no means, no % savings. Really base understanding
And That’s why it’s been Done.
have your say