Ireland: New ‘super property tax’ plan for wealthy homeowners [independent]
August 2, 2012 Leave a comment
THE Government is considering a ‘super property tax’ for owners of large, expensive homes.
Under the proposals, the rate of tax levied would rise with the value of the property, the Irish Independent has learned.
Similar to income tax, the property tax rate would go up in bands linked to the value of the house.
That means owners of such houses would pay a higher percentage rate of tax due to its greater value.
This ‘super tax’ would help the Government to sell the property tax to the public as homeowners would clearly see the rich paying more.
A coalition source said: “You would need bands . . . the millionaire’s house would proportionately cost more.”
It will spark concern among those who already stretched themselves to buy a relatively expensive property, and have already paid stamp duty.
But no decision has yet been made on the proposals — or on the levels at which a higher rate of property tax might kick in.
The Government is trying to devise a system that is as easy as possible to understand.
“Taxes that are complicated are not publicly accepted,” a coalition source said.
The coalition is moving toward a pure market value model for the property tax.
This measures the home in terms of its price if it was being sold on the current market.
The Government is moving away from a site-value tax because it would throw up anomalies.
For example, two houses — one rundown and one modern — on the same-sized site would have the same property tax bill.
In urban areas, houses on the same road tend to be more uniform — with the site and the house being, more or less, the same size and value.
But in rural areas there are often houses of different sizes and values built side-by-side.
Although the site-value tax is favoured by economists, the Government is finding it difficult to identify a country in Europe where it is used effectively.
“Market value picks up everything. It picks up on your house size, location, level of amenities and access to facilities,” a source said.