A very silly question about the new tax rates (apologies in advance!)

SuprSi

I'm slightly confused about the new tax rates and the impact they'll have on new cars. From what I've gathered, if the car is new and registered before July 1st, the old tax rates apply. If registered after the 1st of July, the new tax rates apply.

I'm assuming that all cars bought before the 1st of July will eventually move to the new tax rate (based on emissions), or is that only relevant to cars bought beyond that date?

Like I said, silly, but I can't seem to find a definitive answer anywhere.

Anan1

It would appear for now that all cars bought before the changeover date will stay with the old tax system.:)

yellow012

Anan1 wrote: »

It would appear for now that all cars bought before the changeover date will stay with the old tax system.:)

Its not good:mad: if you currently own a low emissions car. My road tax will be approx €550 after the budget adjustments, a punter who buys an identical car to me after July 08 will only have to pay €150 a year.
Gormless and Co really rewarded the people who currently own low emission cars:rolleyes::mad:

Riskymove

yellow012 wrote: »

Its not good:mad: if you currently own a low emissions car. My road tax will be approx €550 after the budget adjustments, a punter who buys an identical car to me after July 08 will only have to pay €150 a year.
Gormless and Co really rewarded the people who currently own low emission cars:rolleyes::mad:

I certainly thought it was bizarre to introduce a two-tier system but from the sound of it the reason was that it would be too difficult to accurately gauge the emmissions level of all existing cars. Particualrly tru for exisiting low-emmissions cars like prius etc

From July all cars will have a clear rating, A, B etc

unkel

Riskymove wrote: »

From July all cars will have a clear rating, A, B etc

I wish it was that simple. Second hand cars (imported and) registered after July 1st, 2008 will be taxed / VRTd on the new system. Who is going to provide CO2 figures for a 29 year old car?

Anan1 wrote: »

It would appear for now that all cars bought before the changeover date will stay with the old tax system.:)

Yeah it looks like that. I'm already looking forward to the end of the two-tier system on July 1st, 2038

OTK

Riskymove wrote: »

I certainly thought it was bizarre to introduce a two-tier system but from the sound of it the reason was that it would be too difficult to accurately gauge the emmissions level of all existing cars.

This can't be the reason as newly imported second hand cars will all be gauged for emissions from July 08.

Gormley stated that the reason for introducing a system that only applies to new cars was to influence people's purchasing decisions.

Gormley wrote:

The clear objective of this new motor tax system is to influence the purchasing decisions of consumers by rewarding the buyers of low-emitting cars and charging a premium on less efficient vehicles. From 1 July, anyone buying a new car or importing a car can make a choice for the environment by purchasing a low CO2 emitting car, and thus enjoy a lower rate of motor tax. Alternatively, if the choice is to purchase a high CO2 emissions car, a higher rate of motor tax will apply.

Implicit is that it would be unfair to suddenly tax somebody 2k a year on a vehicle they had previously bought in the expectation that tax would be around 500/year. Many more people would be up in arms if this happened. The measure could not be applied to second hand Irish cars or else everyone would just sell their low-emissions cars to a mate and buy it back with lower tax. It had to be applied to newly imported second hand cars as otherwise the country would be flooded with high emission imports.

Opt-in and opt-out will not be allowed as the measure is meant to maintain tax revenue levels. Indeed, gormley hinted that if everyone switched to low emission vehicles, the tax rates would just be raised to meet revenue targets.

Existing prius owners will have to pay 200 euro motor tax more than new prius owners. Not a huge amount compared to the 30,000+ new purchase price.

Basic economics tells you that around half the reduction in VRT will be absorbed by the dealer/manufacturer.

unkel

OTK wrote: »

Basic economics tells you that around half the reduction in VRT will be absorbed by the dealer/manufacturer.

Maybe in a typical textbook economics market with a handful of suppliers and many customers. Not in this situation. Because of block exemption legislation, all pre-tax prices in the EU are the same (more or less). This means that if the tax goes down in Ireland, the customer will get 100% of the benefit from this, presuming the pre-tax price stays the same

Riskymove

OTK wrote: »

This can't be the reason as newly imported second hand cars will all be gauged for emissions from July 08.

OTK perhaps "difficult" was the wrong word, what the Minister was getting at was that it would not be efficient or practical to test the tens of thousands of existing individual cars here in order to identify the emmission band they were in.


Unkel is also correct; prices will come down slightly for new VRT; however pre-tax pruces also change from time to time with inflation etc.