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IT DOES NOT seem to be clear what method of assessment is going to be used for the property tax. Firstly we were told that there was to be self-assessment, but no set off for obtaining professional valuation. Now we are being told that Revenue will send their own assessments to owners. We have not been told on what basis they are making these assessments. Do they understand how complex and expensive it will be to arrive at the right value for each individual property?
Ronan Lyons has demonstrated how easy it is to make initial valuations. As he has said, government agencies, such as the Land Registry – who can tell you who owns what plot of land and what’s on the land – have not been consulted, and the same applies to the GeoDirectory, which is the database of addresses and their physical locations maintained by the Post Office and Ordnance Survey Ireland. The Property Price Register has none of the direct information needed.
While Ronan Lyon’s method is a good general base, it does not reflect the actual condition of the property and the full extent of improvements, extensions etc., which can have major impact on value. It will therefore be necessary to access every property to assess its actual value. A huge task which is also likely to encounter fierce opposition.
This is why Site Value Tax is so much easier to assess, as the value only changes with the impact of new infrastructure, and whole blocks of urban property or suburban estates will have the same land value which is then divided by the site area, whereas even an apparently identical row of houses can each have a different value.
Denmark has operated property taxes and site value tax for many years. They assess residential site values one year, and the rest the next, so that values are reasonably up to date. They also have regional appeal panels, who deal with appeals promptly. The whole system costs just 2.5 per cent of the revenue generated, once the system is put in place. If the tax was eventually used to cover all local government expenditure, this percentage would be much smaller.
One of the problems with the form of the new residential property tax is that it deters economic activity by its nature. Taxing the full value of a property penalises the homeowner who makes improvements to their house, for example, to make it more energy efficient or build an extension. Any home improvements cause much needed economic activity and, especially at this time, should be strongly encouraged.
The government is evidently aware of this problem with a full value tax, attempting to avoid it by not changing the amount of tax payable per property, regardless of improvements, until 2016. While it will likely lessen the tax’s adverse effect on the economy temporarily it does not fix the fundamental problem that, tax holiday or not, those who make improvements to their properties will be penalised for them when this period ends. Other endeavours have been made to try to avoid its detrimental effect; making previously unused houses purchased from developers and second-hand properties bought by first-time buyers exempt from the tax until the end of 2016.
However, these add-ons run counter to how it is justified. The justification behind the full value tax is that owners of more valuable residential property should pay more than owners than ones with less valuable ones. This is on the basis that the former are generally more wealthy than the latter and hence should pay more. However, the tax holiday and the exemptions above also go against its justification.
Some of the exemptions themselves are also distorted. For example, those who currently possess a residential property that is unoccupied have an incentive to keep it that way, rather than sell it on or let it out, as they will be exempted from the tax altogether. Empty or derelict properties are becoming a major problem in our towns and cities again.
Basing the property tax solely on site values is a much easier and effective way of doing what the government wishes to do. This would have encouraged economic growth and ameliorated many of the major problems caused by the property boom without the need to give unfair exemptions to different sections of society. Such a tax would have been in harmony with the government’s objectives as it is based on the principle that it recovers the cost of the amenities enjoyed by individuals but created by the community.
James Pike is an architect and founder director of O’Mahony Pike. He has played a major role over more than 40 years in urban planning and housing in Ireland, but has also been involved in major educational, office, retail, hotel and industrial projects, and in projects in the UK and North Africa. He has played a continuing role in the Royal Institute of the Architects of Ireland (RIAI) since the 1960’s culminating in the presidency for 2006 – 2007. He is currently Chairman of the Irish Architecture Foundation and a founding member of the Urban Forum. He is also a member of a network involved in Smart Taxes, Feasta, and the campaign Irish Site Value Tax.
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They haven’t a clue what these doing.
idiots.
there
*they’re
Sorry for being a grammar Nazi.
They’re
Vote for parties who will oppose this tax .
Jesus sorry.
Having to pay tax on your home is a totally unsuitable idea. My home does not make me one cent in revenue nor will it. Houses are only an asset in so far as you have to live somewhere & everyone needs a home. It’s a despicable, mean broad punitive tax on a home & not a monetary asset. Houses cost a lot of money to maintain & this tax eats in to already decimated household budgets. It misses the mark on every level. Come the next election fg & Labour had better bring security men when their out lying for votes or some of them may wish they hadn’t got rid of Garda stations along with everything else.
Paying tax on a home is a normal idea It is not pleasent no tax is. But The Government has to raise more tax somewhere to pay the difference between what it spends and what it brings in. What would you tax or do you want to cut services. Personally I would like more efficient Public services lower paid Judges Polticians Senior Civil servants Lawyers. And cheaper Electricity, Gas etc. But I can’t see it happening.
Terry, they could try spending less to balance the books.
They are treating property in a different way than any other asset which is discriminatory. Had I the same equity in the bank or in shareholdings they could not come along every year and take 1.8 percent of the value from me and say ‘I’m taking this to pay for hospitals/education/pension’ whatever they need money for. Certainly if my money/ share/assets make a profit they can be taxed in the same way as income tax by way of DIRT etc, but they can’t steal 1.8 of my private property every year in the same way as they’re proposing with property tax.
Someone please provide the causal explanation for why economists are convinced that a property tax does not damage the economy in the way that raising income tax does.
How does taking the same amount of money from the same people in a different way not damage the economy?
You’re not going to get money from people who don’t have it. You’re only going to get this money from people who do have it. People with jobs. People who pay PAYE tax anyway.
How could it possibly be less damaging to the economy to raise a property tax than it is to increase income tax?
Anne its 0.18%
Don’t vote for parties who support a property tax. Vote for parties who will repeal it .
Of course they should spend less to balance the books its what families and business’s do BUT we have the Croke Park Agreement the highest paid judges politicians consultants army officers senior public servants etc.in the World and they aint cutting back, so you raise income which means tax and as they feel they cant get anymore income tax they will tax property a tax which Jack Lynch got rid of for no good reason except to buy an election.
Sorry Eoin my mistake but the principle is the same,the rate is arbitary.
They can send what they like the fools we would not pay the queen and we won’t be paying these totalitarian dictators this is the free state
We did pay the queen and they aren’t anything like totalitarian dictators.
I know the value of my house but its a lot less than any government assessed value would be.
nooan confirmed . Ha that’s ok so
Their should be a universal tax on houses be they rented private or council why should people from Dublin cork or Galway pay more than others? A flat rate would sort all this crap out.
Simple,houses in cities are worth more.Higher value equals higher tax,you do realise this nothing more than a revenue raising exercise.
John
Do you by chance live ctiy of town, and have public footpaths, public lighting, public water, public drainage & access to public transport?
That’s good for you. I don’t. I live 4.4km outside my nearest town, so have to provide my own footpath, lighting, water & drainage, I also do not have access to public transport. We need to run 2 cars. 1 so that I can stay in work 60km away & the second to make sure my children get educated.
Why should I pay for the services you recieve that I do not?
They aren’t assessing it it’s self assessed they are sending out general guidelines.
Someone thought this out well or did they even think
Not sure the article is correct – Noonan confirmed in the Dail the other week that the Revenue were not sending out assessments?
Not sure they know what they’re doing at all. The whole thing looks like a great big cock-up.And to antagonize people even more thete will be a knock on your door by water meter man soon.
The actual owner of the house is not the only one using all the facilities ‘ ie a man with three working son’s has to pay the property charge ‘ the son’s pay nothing ‘yet they use the facilities
Yea get it off them then .The tax should be done on the universal charge so everyone pays and the system is already there ‘ no new department has to be set up .
Its a property tax,people move houses don’t.
Many urban properties are on leased land. Who would pay this tax? Come to think of it, I’m going to seriously devalue my house simply because I don’t own the land!
A house is worth the cost of building (quantifiable) plus the value placed on the site (much more variable). The cost of house-building has levelled at about €800-1000 per square metre, and land values currently range from non-existent in many areas to medium in good areas in and around Dublin. Those houses in and around Dublin which are valued higher (based almost exclusively on the value placed on the site) are valued thus due to people’s desire to live in certain areas. I am not taking about a desire to be in exclusive areas – that is a separate, but equally interesting matter. This desire is usually related to the convenience of services, amenities and other assets which tend to only be in Dublin. For example, the country paid for the Luas, but Dublin residents get the most out of it. Ditto the Port Tunnel, East Link Bridge, M50, National Gallery, National Museum, DART, Dublin Bus, Croke Park, etc. They also benefit from increased employment opportunities due to the presence of many and big employers who are located in Dublin because of such elements of national investment.
It therefore makes sense to argue that Dublin properties should be valued higher, and hence pay more property tax.
If you built a house of any sort where I am in Mayo, even if the plot cost you feck-all, you wouldn’t get back the money you spent building it. Unless, possibly, it was a total shed. And maybe not even then!
And as for services, bogwater free from puddle next-door, free potholes lunar powered street lighting, no rubbish collection, but as we’re so poor the bin man is kind enough to deliver . . . . . . .
So there we have it. This is an article about why we should adopt a site tax rather than about the fact that there is some confusion about how the property tax is going to be assessed because the guidelines have not been issued and in the absence of information wild speculation can abound.
It is ludicrous, unfair and unconstitutional (probably) to levy taxes on people’s sole residences. No levy or tax should result unless there is financial gain or it is evident that the individual has made income or profit from something.
On the other hand, if that’s their game, it might be argued that home owners are owed money from the government for the catastrophic loss in value of their homes, due to negligent stupidity by the incompetent ***holes who run this beknighted apoplogy of a regime which has lost us sovereignty of our own affairs.
I wouldn’t trust the government or the civil service to value a horseburger, never mind a house.
P*ss poor financial regulation, cronyism, ministerial incompetence, we got it in spades.
CAPTA , the Campaign Against Property Tax and Austerity (formerly the anti Household tax campaign) is organising the fight against this unjust tax and the austerity program generally being imposed on the Irish people to pay for the gambling losses of the financial speculators. Please go along to your local meetings and get involved.
http://nohouseholdtax.org/
Taking up another cause? So it’s now an anti Household Charge + anti Property Tax + anti Water Charges campaign? Maybe choose another name, something more generic so you can add in other things to campaign against. But it’ll look a little bit silly if you take up too many causes and spread yourself a bit too thin…
Nikolas,
There is just one cause. That is the battle against the loading of the private debts of speculative financial capitalism onto the backs of the Irish people.
The Household tax, property tax, water charges, various other tax increases and multiple cutbacks to our social systems are the means by which we will be made to pay this illegitimate debt. They are the symptoms rather than the cause of the problem.
This economic warfare is summed up in the word ‘Austerity’ which is why we included in our name. CAPTA has a nice ring to it so we’ll stick with that for the moment but if you have any better suggestions let us know .
Basing a tax on site value alone may well lead to people building bulging monstrosities on relatively small sites. Maybe not a good way to go
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