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And after the Household charge?
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20-12-2011 1:31am#1The household charge is here for two years (so they say). It will then be turned into a property tax and at the moment they (the government) want to base this on the value of the property - much the same as in the England.
Basing the property tax on the value of the property requires someone (possibly estate agents to value every property in the country - a very expensive operation at a time when there are cuts all around.
Has anyone any ideas as to a better way to calculate a property tax, as there is going to be one.
I would suggest that the tax is based on the overall floor size of the property. The bigger the property the higher the tax, and a small property pays a lot less. And not too expensive to implement.0
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if i live in south dublin (still) i'd agree
but site value is the way to go0 -
if i live in south dublin (still) i'd agree
but site value is the way to go
The trouble with "values" of something is that they are not definitive - one person may say its value is x while another might say it's 2x. In England there was and still is, I believe, many disputes over the valuations. Two neighbouring houses have different values because one put up an extension - so who's to know the value?
You can also get a cheap site and build a mansion on it. So should the owner only pay a small amount of tax?0 -
The suggestion is a site value tax, that would essentially ignore the amount / quality of buildings or other development on that land. All sites in the same neighbourhood would have the same value per m2, although if there was something special about the site, e.g. it has materially better services than adjacent sites that would give it a higher valuation, then the higher valuation may be used.0
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Basing the property tax on the value of the property requires someone (possibly estate agents to value every property in the country - a very expensive operation at a time when there are cuts all around.
I'm pretty sure it is not going to be base on value of property, as this is highly subjective and decreasing annually at 15%. Would be a sure way to create another unsustainable tax base.
The original talk (by last government) was site valuation tax as stated above and this is on M2 of site for each area.
Other than that you'd be looking at some notional or nominal value based on number of bedrooms if you wanted to be really blunt or m2 size of property.
The reason for site method is that it better encourages full development of sites in desirable areas. Lots of Dublin suburbs have 70's style bungalows which are very energy inefficient and are a terrible use of space. Would encourage demolition and replacement with 2 or more units, halving per unit tax. Would need to take account (discount) of protected structures though as otherwise they'd be left to rot.0 -
The amounts they are quoting are beyond belief. Include water charges and they have just put the final nail in the coffin. Jesus Christ!
How much is a standard household looking at in water charges per year?0 -
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You will get into lots of problems with this one way or the other. Some people in the country will be complain how they don't get any services yet have to pay a tax that people in Dublin benifit from.
How it is going to apply to appartments?
I am a great believer in the user pays as a method of cutting down waste and more even distribution of taxes that creates. I really don't really think a tax on having something is just. Tax somebody on use or purchase but to do both.0 -
I'd imagine any tax, whether site value or property value based would have to be self assessed and self-declared. There's no way the Gov are going to get an army of estate agents to value every place in the country on a yearly basis.
I hope that it's based on site value rather than property value - but I too have no idea how such a method would be used in the case of apartments - perhaps the value of the site the apartment block sites on divided by the number of units? Main problem with this is that penthouse owner would pay the same as the guy with the 1 bed ground floor unit.0 -
Ray Palmer wrote: »I am a great believer in the user pays as a method of cutting down waste and more even distribution of taxes that creates. I really don't really think a tax on having something is just. Tax somebody on use or purchase but to do both.
I agree.
Tax on usage, purchase, income, inheritance, etc. but there is something remarkably incidious about a tax on ownership which does not sit right with me.0 -
It's constantly being referred to as a cost for local services and councils, so therefore the people who benefit from those services should pay. I don't think it should be based on the UK system, having lived there that was even more unfair. Based on the value of the house regardless of the income of those who lived there, and only a 25% discount for single occupancy.0
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Part of it is about a sustainable tax base and part of it is about the economic use of an asset. With lower stamp duty and no CGT on PPRs, hopefully it will encourage some mobility in the market, allowing families have bigger properties and empty-nesters have something more appropriate to their needs.Ray Palmer wrote: »I am a great believer in the user pays as a method of cutting down waste and more even distribution of taxes that creates. I really don't really think a tax on having something is just.
Why? Buy a TV and you pay import duties and VAT. Own a TV and you need to have a TV licence and pay VAT of any cable / satellite services.Tax somebody on use or purchase but to do both.
Buy a car and you pay import duties (where applicable), VRT and VAT. You then pay motor tax annually and excise and VAT on fuel, parts and servicing. You pay the council for parking.
The best tax systems are those that are certain, equitable, convenient and efficient. To avoid inappropriate (but legal) avoidance (as opposed to illegal evasion), the tax base should also be diverse. The total tax take needs to be adequate and sustainable. Simplicity / understandability, exportability and neutrality may also be important. Each of those principles competes with the others
Until the modern era, the majority of taxes were either property (rates) or sales (excise, stamp duty) related. In the modern era, the emphasis has shifted to income and value added taxes, with additional corporate and capital gains / acquisitions taxes. However, all those taxes are very much focused on economic activity and fail to provide for those times when there is less economic activity.
Residential property owners benefit hugely from local government through water, waste, drainage, fire, planning, transport and other services, but contribute back very little directly as all the above taxes go to central government. In contrast, commercial property owners contribute a substantial amount in local government funding.0 -
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BlairWaldorf12 wrote: »I really don't really think a tax on having something is just. Tax somebody on use or purchase but to do both.
If you get a room in a hotel with a bathroom but don't use the bath - you still have to pay for it.0 -
should definitely be based on square footage of the property, valuation based taxes are far too subjective and open to manipulation0
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Maybe, but also on the ability to pay.the groutch wrote: »should definitely be based on square footage of the property, valuation based taxes are far too subjective and open to manipulation
There's a hell of a lot of people who were doing ok until around 2008 and who may have extended their house or built a house before then who now find themselves out of a job and in dire circumstances.
Should they be expected to pay a much larger amount?
Until this country is back on its feet there should be NO property tax.
After all it's not going to this country, it's going to pay back unsecured secondary bondholders in anglo.
I will not be paying it until I see some improvement in things here.0 -
Why? Buy a TV and you pay import duties and VAT. Own a TV and you need to have a TV licence and pay VAT of any cable / satellite services.
Buy a car and you pay import duties (where applicable), VRT and VAT. You then pay motor tax annually and excise and VAT on fuel, parts and servicing. You pay the council for parking.
I would look at that somewhat differently to you. Is it not the case that you pay motor tax for the use of public roads (even though its called motor tax) rather than the use of your car. You are paying to use something that needs to be upkept and maintained. If you had the car parked up on private ground you would not be required to pay motor tax (not yet anyway, even though I believe there is at least talk of requiring people to tax cars in their name but not in use)....something which it would seem that people would very very strongly oppose I may add after reading a thread on the motors forum some time back.
I suppose you could argue back that you are not using the car if it is off a public road but using the house if you live in it. But you would not be required to pay motor tax if using the car on a privately owned road. In the same vein you are "using" the car if storing personal belongings in it but again if its parked up in private ground you would not be required to tax the vehicle....hence you are paying tax for the use of the public road as oppossed to use of the car as I see it...regardless of the fact that it is branded as motor tax.
Are fuel, parts and servicing not consumables that you would need to pay VAT on like any other consumables? Likewise you would pay VAT on home heating oil, electric kettles, timber flooring or servicing a boiler. Remember too that you pay VAT on building materials that go into a house day one along with stamp duty. I would view a parking permit as payment for the provision of a somewhat limited resourse, again that needs to be upkept and maintained.
Re the TV, you will likewise pay VAT and import duty on any other such item and such is now broadly accepted by the public for a long time at this stage, so I don't particular see how your point is of any particular relevance in the current debate. Again if you are subscribing to satellite services or cable you will pay VAT, just as you will for broadband or telephone line...very much accepted by pretty much everybody now I would suggest. I do acknowledge that you will need to pay a TV license if you have a TV in your house regardless of whether you use it or not, as far as I know (not that I agree with that). Arguably you can ditch your TV and do without it, but housing is a most basic necessity.Residential property owners benefit hugely from local government through water, waste, drainage, fire, planning, transport and other services, but contribute back very little directly as all the above taxes go to central government. In contrast, commercial property owners contribute a substantial amount in local government funding.
Important to bear in mind that many houses have their own wells and drainage systems, already pay hefty bin charges, pay well over the odds for planning fees, may never use the fire services but if they did are landed with an extremley hefty bill (personal experience). Why should you pay twice or why should the guy with his own private well subsidise the guy who uses the public water if you want to look at it that way? I think you should pay for what you use. I'm really not sure why you mention transport as non residential property owners benefit from transport also to the same degree. Again whether or not you are a residential property owner you are paying for transport in the form of motor tax, exise duty and VAT on fuel, VRT and VAT on car, tolls, bus/train fares etc... so I'm not sure how its logical to link residential property taxes and transport sevices whatever way you look at it0 -
For the same reason that I, a single person with no children must subside those that have children in education.Originally Posted by john.west
Why should you pay twice or why should the guy with his own private well subsidise the guy who uses the public water
For the same reason that I must subsidise people of the dole.
For the same reason that I must subsidise those claiming rent allowance.
For the same reason that I must subsidise child benefit .........0 -
For the same reason that I, a single person with no children must subside those that have children in education.
For the same reason that I must subsidise people of the dole.
For the same reason that I must subsidise those claiming rent allowance.
For the same reason that I must subsidise child benefit .........
You are of course very correct....we do live in a welfare state and by its nature there will be winners and loosers if you want to look at it that way. I suppose even if it wasn't a welfare state and you paid taxes to maintain public services you would be a looser if you did not fully avail of said public services. By its very nature tax is unfair and there will be winners and loosers.
I was actually pretty annoyed when the health levy was introduced. I am on a group VHI scheme at work, the premium is pretty hefty considering I am a relatively young, fit and healthy person. At that point I am already subsidising older and less healthy people and paying for towards a health system that is highly wasteful and inefficient. Then a health levy meant I pay again for something I never actually use.
I think a lot for a lot of people a property tax will actually push them over the edge, finanacially on the one hand but will alienate others who can actually afford to pay.
Believe it or not I am not totally against a property tax. Many other European countries have one I understand. However, as long as such is done as fairly as possible. Take account of the guy who has his own well and such fully meets all his water needs etc. etc. Most of all I would like to see much needed efficiencies and major reform is made in the public service and spending as has being promised, break up these quangos that give a very poor return before any property tax is introduced besides going for the easy pickings first...they have being picked on too much already at this stage.0 -
You are of course very correct....we do live in a welfare state and by its nature there will be winners and loosers if you want to look at it that way. I suppose even if it wasn't a welfare state and you paid taxes to maintain public services you would be a looser if you did not fully avail of said public services. By its very nature tax is unfair and there will be winners and loosers.
I was actually pretty annoyed when the health levy was introduced. I am on a group VHI scheme at work, the premium is pretty hefty considering I am a relatively young, fit and healthy person. At that point I am already subsidising older and less healthy people and paying for towards a health system that is highly wasteful and inefficient. Then a health levy meant I pay again for something I never actually use.
Even VAT which everyone pays, is unfair - because the rich and the poor pay the same rate. I don't think that there is a "fair" tax anywhere. "You can please some of the people some of the time, some of the people all of the time, but you can never please all of the people all of the time."
I used to be like you, fit and healthy, and since the age of about 4 (when I had my tonsils out), never spent a night in hospital. But I've never had any health insurance. Then bang - in the last 3 years I've had a hernia and then a year later, diagnosed with cancer of the bone marrow. I've spent over 4 months in hospital mainly for tests (and they didn't do the right tests) for anaemia and a bad back. Basically the outcome was the cancer.
Ah, well, that's life.0 -
Even VAT which everyone pays, is unfair - because the rich and the poor pay the same rate. I don't think that there is a "fair" tax anywhere.
I think in essence we are both agreed that VAT or indeed any form of tax is unfair. Arguably the higher earners have paid more income tax on their earnings so why should they pay higher VAT? People with more money in the bank have paid more DIRT so why should they pay more VAT or VRT on the car the put money aside and saved for and so on...."You can please some of the people some of the time, some of the people all of the time, but you can never please all of the people all of the time."
In the same manner that you can fool some of the people some of the time but you can't fool all of the people all of the time... Again a property tax will not be fair to all as you put. I can accept that and unfortunately like many other taxes there will be people in the margains who are particularly hard done by. But having said that I would hope that every effort is made to make it as "fair" as is possible. And as afore mentioned I think at this point I would only accept it if reform was first made in how tax revenue is spent and allocated...priorities and all that.I used to be like you, fit and healthy, and since the age of about 4 (when I had my tonsils out), never spent a night in hospital. But I've never had any health insurance. Then bang - in the last 3 years I've had a hernia and then a year later, diagnosed with cancer of the bone marrow. I've spent over 4 months in hospital mainly for tests (and they didn't do the right tests) for anaemia and a bad back. Basically the outcome was the cancer.
Ah, well, that's life.
Firstly sorry to hear of your health problems. I hope you are now getting the treatment you require and on the road to making a recovery. I didn't mean my remarks about my health to seem snide or smug to you as that may well have being the way they came across under the circumstances. I would never become so complacent as to assume good health will always be a given with me either. My VHI is part of my remuneration package at work. Its a corporate scheme that I automatically get if I work in the company I'm in. Like yourself though I probably would not avail of it if I was not in the scheme and thats unfortunate. Unfortunate as I believe its too expensive and I personally don't feel its right that I should subsidise others in this manner or to that extent.
I paid really high motor insurance premia for many years when I was younger despite not having an accident so why should older drivers not subsidise me back then? A motor car is not a necessity you might say but believe me it certainly is a basic necessity if like me you live in the back a$$ of beyond with a practically non existant public transport system, and want to earn any sort of meaningful livlehood.
Aside from this I would feel its hard to justify paying VHI premiums when the money is being ploughed into a grossly inefficient and wasteful healthcare system. One that I would also be contribuing towards in the form of a universal social charge to cover over 70's automatic entitlement to medical cards regardless of thier means or state of health....I know, I know the story would most likely be very different from me if I was unfortunate enough to be diagnosed with a serious medical condition and taxes are unfair...but still.....0 -
I think in essence we are both agreed that VAT or indeed any form of tax is unfair. Arguably the higher earners have paid more income tax on their earnings so why should they pay higher VAT? People with more money in the bank have paid more DIRT so why should they pay more VAT or VRT on the car the put money aside and saved for and so on....
Again a property tax will not be fair to all as you put. I can accept that and unfortunately like many other taxes there will be people in the margins who are particularly hard done by. But having said that I would hope that every effort is made to make it as "fair" as is possible.
Firstly sorry to hear of your health problems. I hope you are now getting the treatment you require and on the road to making a recovery. I didn't mean my remarks about my health to seem snide or smug to you as that may well have being the way they came across under the circumstances.
I paid really high motor insurance premia for many years when I was younger despite not having an accident so why should older drivers not subsidise me back then? A motor car is not a necessity you might say but believe me it certainly is a basic necessity if like me you live in the back a$$ of beyond with a practically non existant public transport system, and want to earn any sort of meaningful livelihood.
Aside from this I would feel its hard to justify paying VHI premiums when the money is being ploughed into a grossly inefficient and wasteful healthcare system. One that I would also be contribuing towards in the form of a universal social charge to cover over 70's automatic entitlement to medical cards regardless of thier means or state of health....I know, I know the story would most likely be very different from me if I was unfortunate enough to be diagnosed with a serious medical condition and taxes are unfair...but still.....
I think people become more discontent when there are cut-off points in any tax system: up to x amount and you pay z% tax, from x to y you pay z+1% tax, etc. those just above the cut-off point feel particularly hard done by. Just like the stamp duty on house purchase.
If we go back to the original question: what type of property tax will we be looking at? I think something based on the area of the dwelling like 1.75 euros per sq. m. constructed. And maybe something for the land the dwelling is on. Possibly if the land is in excess of half an acre - but that is bringing in a cut-off point which I don't like!
Thanks for the good wishes regards my health. Yes, I am recovering well: slowly but surely, especially after the bone marrow transplant. Treatment has cost something in the region of 40k, paid for by the Argentine government as I had no health insurance (and I am on a tourist visa - for the last 3 and a half years!). Thank you very much Argentina.
I never understood there to be seem snide or smug remarks.0 -
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Personally I think the tax should be structured to take into account various elements:
Site tax (say a flatrate of EURO 500)
Size of dwelling tax (50c per square foot)
Value of property tax (1% of the open market value- good luck calculating this)
Reduction for leasehold properties (10% of any annual management and/or lease charges)
The tax has to be seen as equitable- and no matter how its structured, you are going to have people calling foul- by taking into account several different elements- rather than simply the value of the house, the size of the house, whether they pay a management company for services the council provides for free elsewhere etc- you show that you are at least attempting to recognise the circumstances people are in.
To be honest- I genuinely don't think the politicians have any cognisance of just how dire most people's financial situations actually are- its not even a class thing- some of the people we consider to rich and famous are even worse off than people on very modest incomes- if their debts are taken into account.
We really are at a cross-roads- yes, we need to change the manner in which our tax base is structured- and whether we like it or not, there has to be a cost associated with owning an asset. However- the people have been devastated financially- thats the difference between now and in the 80s, in the 80s- the country was bust- but on a private basis, while we had very little, we also owed very little- now we're all in hock for ridiculous amounts........
Its a great pity that of all the people in the Oireachtas- there doesn't seem to be a voice representing the people..........0 -
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smccarrick wrote: »Personally I think the tax should be structured to take into account various elements:
Site tax (say a flatrate of EURO 500)
Size of dwelling tax (50c per square foot)
Value of property tax (1% of the open market value- good luck calculating this)
Reduction for leasehold properties (10% of any annual management and/or lease charges)
Ouch, although I think your logic might be pretty on the money, the figures themselves seem very steep to me. Based on your figures I calculate an annual charge of €2,750 for a hardly massive 1,500 sq foot house valued at €150k.
Site tax of €500
1,500 sq feet by 0.50 cent is €750
1% of €150K is €1,500
Total: €2,750
In the Dublin region I could see how this figure would rise severly. I think such a charge would be the straw that breaks the camels back for many, even those in quite a comfortable position at the moment, and bearing in mind the camels back is already broken for many.0 -
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Ouch, although I think your logic might be pretty on the money, the figures themselves seem very steep to me. Based on your figures I calculate an annual charge of €2,750 for a hardly massive 1,500 sq foot house valued at €150k.
Site tax of €500
1,500 sq feet by 0.50 cent is €750
1% of €150K is €1,500
Total: €2,750
In the Dublin region I could see how this figure would rise severly. I think such a charge would be the straw that breaks the camels back for many, even those in quite a comfortable position at the moment, and bearing in mind the camels back is already broken for many.
Shocking though it may seem- there were precious few 1500 foot properties built over the last decade- 1500 feet is considered to be generous by most- though most probably cramped by people living in it........
It has been stated that the property tax *is not* going to be a replay of the 'Dublin tax' which generated such anger in the past- that it is going to be a universal tax, everyone will have to pay (curiously the statement continues 'according to their means'- there being an assumption that the size of a property is an indicator of the net household income- as in the case in most other countries- but in our broken economy, not true).....
So- everyone will pay, according to their means, it'll be fair, and its not a Dublin based tax........ yeah right........ lets see what comes out in the wash........0 -
[I accept that we need to widen our tax base, and I don't feel inclined to argue about it. If you disagree with me about that, please do not invite me to debate it with you: I don't have the energy to go over that particular ground.]
Houses more than about 30 years old have a valuation attached to them: it is known as the rateable valuation, previously known as the Poor Law Valuation (PLV). It is based on a formula set down about 1850 to finance the workhouse system, and was later adopted as the basis of rates paid to local authorities.
It's an "annual value". Originally, it was a calculation of what it would have cost to rent such a house for a year in the middle of the 19th century. The valuation in the later years when the system existed was largely done by formula, based on the size of the house, number of bathrooms, and various other factors which I am not sure about. Most houses of reasonable quality had values in the range £10 to £30 (what rent they might have commanded in the 1850s).
So why not dust off the old files, and update them by conducting a similar exercise on newer houses and on houses that have been significantly modified since they were originally valued? [Planning authorities should have files on all homes built since the abolition of the PLV system.]
Rates, for those too young to remember the system, were based on PLV, and were assessed as £x per £1 valuation. So if you had a house valued at £15, and rates were struck at £12 to the £1, then your annual rates bill would be £180.
I paid rates in the past, and while many people found the bills difficult, there was not a great tendency to assert that property should be exempt from tax simply because it was somebody's home (there were other complaints about the system and its operation).
I would favour re-instituting a system for putting a value on the use of a property for a year, and taxing people on it. But rather than hitting everybody for so-much-in-the-euro, I would compute it into the individual's income and subject it to Income Tax. That takes some account of ability to pay.0 -
smccarrick wrote: »Personally I think the tax should be structured to take into account various elements:
Site tax (say a flatrate of EURO 500)
Size of dwelling tax (50c per square foot)
Value of property tax (1% of the open market value- good luck calculating this)
Reduction for leasehold properties (10% of any annual management and/or lease charges)
The tax wont be anything like that, you are just scaremongering. I and i'm sure others dont need to read such bull.
They have stated that they aim for €500million from this tax (will increase over the years) and there are 1.6 million homes that will pay it. So we can work out that the average will be €310. Large homes in citys will pay more, small homes in the middle of nowhere will pay less. Like it or lump it, a 1500sq house in South Dublin will probably pay the same/more than a 2500sq house in Leitrim.
AFAIK, in some small US counties their property tax amount is dictated by the budget required to run local services. If the town requires more money for the following year people will have to pay more. Although it wont work like that here, there are merits to it. Local government have to produce a budget for the public to see, everything is broken down and every cent is accounted for. It cuts down on needless waste when the people can see that their tax bill has increased because, the mayor is spending 5k on a junket, the top brass have received a pay increase, etc etc.
It something that should at least be considered.0 -
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The tax wont be anything like that, you are just scaremongering. I and i'm sure others dont need to read such bull.
They have stated that they aim for €500million from this tax (will increase over the years) and there are 1.6 million homes that will pay it. So we can work out that the average will be €310. Large homes in citys will pay more, small homes in the middle of nowhere will pay less. Like it or lump it, a 1500sq house in South Dublin will probably pay the same/more than a 2500sq house in Leitrim.
AFAIK, in some small US counties their property tax amount is dictated by the budget required to run local services. If the town requires more money for the following year people will have to pay more. Although it wont work like that here, there are merits to it. Local government have to produce a budget for the public to see, everything is broken down and every cent is accounted for. It cuts down on needless waste when the people can see that their tax bill has increased because, the mayor is spending 5k on a junket, the top brass have received a pay increase, etc etc.
It something that should at least be considered.
Lets revisit this in 5 years time and see whats happened.........
The Irish property tax is going to the central exchequer- and while folk may like to imagine that its to supply and run local services, well, if you consider road tax to be for the upkeep of your local roads, you get my drift......
The 500m from this tax- is very much the thin edge of the wedge, Phil Hogan is on record stating that they can use this tax to keep their election pledge to not increase income tax.........
Lets wait and see what happens........0 -
Why discuss ways to pay this tax?? Just dont pay it and save yourself a lot of hastle.
I,m not paying a tax where I enter an agreement with the government that ties my hands and gives them concent to change any rules and prices to suit themselves. I believe that nowhere in this contract does it say they wont force YOU to sell your home if you fall a few years behind in tax payments,.0 -
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THE SECRET COVENENT wrote: »Why discuss ways to pay this tax?? Just dont pay it and save yourself a lot of hastle.
I,m not paying a tax where I enter an agreement with the government that ties my hands and gives them concent to change any rules and prices to suit themselves. I believe that nowhere in this contract does it say they wont force YOU to sell your home if you fall a few years behind in tax payments,.
Unfortunately, its not as black and white as you're painting it.
As an Irish citizen, living in Ireland, you have an implicit agreement with the Irish state to obey the laws of the land- which can and do change. In this instance- the revised law concerns the property tax- whether you like it or not, by not paying the tax, you are breaking the law, and can be treated accordingly by the Irish judicial system, as specified in the act.
If you're not happy with it- you can always move- and ultimately, it may be years hence, many people may decide that the laws in force here, and repayment of the national debt, is too oppressive, and they wish to move elsewhere. So be it. A small cottage in the North of Portugal on a small pension with a satellite dish, a reasonable stock of books and internet access- might sound a good proposition.........0
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