Are we over-reacting to the property tax?

NIMAN

As a former NI resident who grew up with their parents paying big rates, I am wondering if we are over-reacting to the new property tax?

OK so I don't want to pay it like everyone else, but it is only €100 for now.

Compare that to NI, and the difference is shocking. My widowed mum who is a pensioner was paying £1200 per year for a long time. Only in recent years did she qualify for a rebate of sorts.

I also have friends who pay similar amounts for 3 bed semi's.

OK so they get their streets cleaned, rubbish collected for free, but not much else.

Even if the new rates of tax mentioned in the Irish Times article yesterday
http://www.irishtimes.com/newspaper/breaking/2011/1221/breaking6.html
are brought in at end of 2012/early 2013, then most people will probably pay at most €563. Still fair bit behind our NI counterparts who we love to compare ourselves to when it suits us.

And afaik, most countries have some sort of property tax.

So, are we moaning about something we shouldn't be?

woodoo

I think we are over reacting. Most EU countries have some form of a property tax. In the long run it will be good for this country. Sustainable income for the government unlike stamp duty etc. But i'd like to see the money go to local government (after its reformed of course).

n97 mini

It was said on the radio a few weeks ago that people prefer indirect taxation as they feel they can chose to avoid/reduce them.

For example if I drive a car that incurs €600 pa motor tax I can chose a different car next time that incurs €160 pa.

Or if I smoke I can decide to cut down or quit.

But you can't avoid property tax, no matter what you do.

harrythehat

I think it is a major overreaction. And I think it is hugely irresponsible for opposition TDs to organise this non-payment campaign.

100e/year is nothing compared to the UK or most places in Europe. People are going to grope and moan any time something costs them money, but at the end of the day when the tax is introduced it will be fair and progressive.

Manach

This is not an overreaction. The Government is trying to divorce itself from the economic realities, whereas income relates to money coming into a household. By not measuring council "services" against what people can actually afford in their pay packets in the name of a steady revenue stream breaks the link between what can be costed/funded. Hence the council gets to live in an alternative reality whereby funds can be summoned by increasing house taxes.

zac8

n97 mini wrote: »

But you can't avoid property tax, no matter what you do.

Rent?

darragh o meara

As much as I don't agree with what the money is gonna be used for, and let's face it the likes of anglo & co will see plenty of it no matter what anyone says! I do agree that something needs to be done but in return for services ie. bin collection etc. if my bins were being collected as part of this charge as is done in most country's with property tax I'd pay it no problem as going by the figures being bandied about I'd save money on what I'm paying at the moment.

However it's where it stops I'm worried about. How long before they realise that they need more money and they decide to up it? ( a year I'd imagine and yearly after that ) so up the charge goes. They can only let it go so high before the great minds think up of another tax.

If reform started at the very top and worked down people would have a bit more respect for this type of tax. But in reality there isn't gonna be a wealth tax cos most of the TDs will be caught in it as will their wealthy buddies. There won't be a mass overhaul of pensions to ex politicians as they'll all want it themselves, radical overhaul of the PS will never really happen cos the unions have the government to the wall. I heard a phrase being used a few weeks back which is so true and that was " let the politicians live on welfare or minimum wage for a month and see how quickly things get done "

fenris

No, the fundemental issue to me is that it is yet another money grab to fund the grossly inefficient and ineffective crony club that is the public/civil service.

It is pretty basic, plug the holes in the bucket before you pour more in. My objection is that as long as the public/civil service have access to more cash they will just burn it to keep the status quo. To me it is the peole who are drafting and advising the government without being held accountable that are the real drain on the country, not the poor clowns that stood for office.

mikom

You will get nothing for it.
Also, renters, don't think this will not be passed down to you.

AlekSmart

NIMAN wrote: »

As a former NI resident who grew up with their parents paying big rates, I am wondering if we are over-reacting to the new property tax?

OK so I don't want to pay it like everyone else, but it is only €100 for now.

Compare that to NI, and the difference is shocking. My widowed mum who is a pensioner was paying £1200 per year for a long time. Only in recent years did she qualify for a rebate of sorts.

I also have friends who pay similar amounts for 3 bed semi's.

OK so they get their streets cleaned, rubbish collected for free, but not much else.

Even if the new rates of tax mentioned in the Irish Times article yesterday
http://www.irishtimes.com/newspaper/breaking/2011/1221/breaking6.html
are brought in at end of 2012/early 2013, then most people will probably pay at most €563. Still fair bit behind our NI counterparts who we love to compare ourselves to when it suits us.

And afaik, most countries have some sort of property tax.

So, are we moaning about something we shouldn't be?

You don't need to be an NI man to remember domestic rates in the Republic.

I can still remember the trek,with my mother, up to the Rates Office in Castle St Dublin in order to pay a "moiety",or instalment of our Rates bill.

The reality is that the 1977 Fianna Fáil administration which implemented Prof Martin O Donoghue's wonderful idea,actually set in motion the process which has led to the bankruptcy of modern Ireland.

Heres some filler-in.....

http://www.politico.ie/component/content/article/221-politics/5138-martin-o-donoghue-will-it-be-roses-all-the-way.html

And a bit more by way of interpretation....

http://www.psai.ie/conferences/papers2006/healy.pdf

It's important to realize,as the psai document points out,that Domestic Rates were not abolished by Sylvester Barrett,but rather the responsibility for payment was moved from the householder to the State,an often overlooked but fundamentally important point when discussing any Property based taxation.

The entire Rates mechanism remains firmly in place with books of valuation and local authority rates departments all very much in evidence still.

The only possible way to legally avoid paying Domestic Rates is not to own property.

Whilst many Landlords will pass on the Rates amount via Rental,this remains something which a prospective tenant could negotiate with a Landlord,and in many cases,particularly in a sub-divided property the amount will be substantially diluted for a renter as opposed to a purchaser.

laoch na mona

as long as the ***** who built hideous mansions have to pay more

prettygurrly

what i dont understand is how they can just have a blanket €100. there's seems to be no difference if a household contains one person or 10 people. a tenner each for 10 renters in a tenement block in dublin is not much, but 100 for a single person living in a house is huge.
also it is a household charge not a property tax, so therefore renters will have to pay it. when we took on this house that we rent we were told that we would have to pay the household charge and that was back in May. I dont know what people who have a lease from before the announcement of a household charge will do. will they have a case not to pay it, will it result in the landlord not continuing their lease when it comes up for review?


also they say they'll get us through our wages if we dont pay. what if you have the esb bill in your name and your flat mate has the gas bill in theirs, will they know that there's two of us and take 50 off both of us or are they going to leave it in the awkward situation of flatmates having to demand money off each other because they were got through their wages.

there's a lot of grey areas with this blanket €100.

for next year, the property tax they plan to bring in, will that be the person who pays the mortgage on a property or those of us that are living in the property?

so many questions.

meglome

A major overreaction. Sure it would be better if it were based on the value of your house or land but as a first step it's nothing.
Now the overspending and inefficiency of the government is another point but that's not the topic in hand.

thebman

I think a lot of people are over reacting but if your not getting services but expected to pay the same rate as everyone else then it is obviously going to get at people. However, if the cost of providing services to you is higher than it is going to be offset by less services provided.

Basically I think the challenge will be for County Councils to show they are providing value for money. This is going to be a problem because they simply aren't at the moment. Peoples anger to having to pay this tax could be a good way to kick start them into becoming more efficient.

FreudianSlippers

We're not only over-reacting, we're acting like a bunch of spoiled babies. It's a laughably low tax comparatively and we need it.

mickoneill30

Once I saw the bunch of looney TDs who oppose it I decided it can't be that bad.

cnoon

Remember it"s only starting at €100,it will go up & uP

fenris

IT is not "just €100" it is another €100 on top of the bailout charge AKA USC and all of the other addition taxes that we are paying.

The baseline is not your income and outgoings as of today, the baseline is income and outgoings at the time of the start of the bailout, if you measure in any other manner then you don't get the full picture as to what is being taken out of your pocket to pay for cowen's cronies little mishap.

edgecutter

This is just the start and I believe that a few years down the line we will have huge property taxes that will only increase. Not to mention that there will be a few other sneaky charges that will be chipped in.

n97 mini

zac8 wrote: »

Rent?

You haven't been keeping up with the news, have you. Tenants pay in the UK, and it's proposed by the IPOA that the same will happen here.

n97 mini

fenris wrote: »

IT is not "just €100" it is another €100 on top of the bailout charge .

This is nothing to do with the bailout -- that has been paid for. The two biggest costs going forward are Social Welfare and Public Sector pay and pensions.

MyKeyG

FreudianSlippers wrote: »

We're not only over-reacting, we're acting like a bunch of spoiled babies. It's a laughably low tax comparatively and we need it.

Why do people keep approaching this thing in the present? €100 is nothing but what are we saying to the government by paying it? 'Ah sure charge us what you like when you like'.

€100 in 2013 for house tax but what in 2014? I think it's the precedent that's the problem here not the amount. Better to nip it in the bud here and now. No country has ever taxed it's way out of a recession and if a government ever does manage it it sure as feck won't be the baboons running this country.

Dannyboy83

thebman wrote: »

Basically I think the challenge will be for County Councils to show they are providing value for money.

This is going to be a problem because they simply aren't at the moment.

Peoples anger to having to pay this tax could be a good way to kick start them into becoming more efficient.

I think the above explains people's anger;
A) Most people are actually fairly happy to pay more tax if they get a better service. e.g. if you pay road tax, then you expect to get a normal road to drive on.
They're not happy to continue to pay for services they never receive, not to mention pay more for them.

It tough luck for the Local Authorities.
They will have to reform.

Everyone knows this tax is simply to pay for the public sectors pay increases/increments.

Either there is going to be a confrontation between government and the unions over the CPA in the short term, or we will end up like Easter Island.

R P McMurphy

n97 mini wrote: »

This is nothing to do with the bailout -- that has been paid for. The two biggest costs going forward are Social Welfare and Public Sector pay and pensions.

Magically paid for already? We will be paying interest on the money borrowed for the bail out for decades, that is if we ever manage to clear it and not just resume rolling over the debt if we can get back into the markets

robd

Dannyboy83 wrote: »

Either there is going to be a confrontation between government and the unions over the CPA in the short term, or we will end up like Easter Island.

It's a separate matter. Given the 10 billion adjustment still needed and the rumblings over the last few weeks it seems that the CPA will be re-negotiated at some stage soon. At €100 per house, property tax raises €160m per year, at €1000 per house, property tax raises €1.6 billion.

The lack of growth over next 2 years (even negative growth) is going to leave all agreements and election promises thrown out the window. This will be used as the excuse, and in fairness they are right.

CPA will have to be re-negotiated. Needs about 20% cut off salaries.

Headline welfare will have to be re-negotiated. Needs about 20% cut off every single payment.

robd

R P McMurphy wrote: »

Magically paid for already? We will be paying interest on the money borrowed for the bail out for decades, that is if we ever manage to clear it and not just resume rolling over the debt if we can get back into the markets

In order to be allowed borrow, you have to service (pay interest) on your current debt. This is how western economics work. Money is created by private banks and loaned to countries. Ireland is trying to get back to that position.

NOTE: I don't agree with system, but Ireland is too small to change it and survive. Needs US, UK, France, Germany to act. Ireland is largely at the forces of those bigger than us.

ardmacha

The baseline is not your income and outgoings as of today, the baseline is income and outgoings at the time of the start of the bailout

,

The "baseline" was the boom period when the government had huge revenues from stamp duty. These revenues need to be replaced and so there will be property tax, like most every place has. Of course local authorities can tighten up their efficiency and they must do so, progress has been a bit slow on this front. But this will be the difference between a €700 property tax and a €650 property tax, not the difference between having a property tax and no property tax.

Three years into this crisis it is depressing how unrealistic the entire discussion on this topic is. Have people learned nothing?

Head The Wall

I don't agree that we need to replace those revenues, we should look to reverse some of the ridiculous growth in expenditure that took place over the boom years. Yes tax increases are needed but sort out spending alongside it, the CPA is saving feck all and the last implementation body report was torn apart here.

BornToKill

n97 mini wrote: »

This is nothing to do with the bailout -- that has been paid for. The two biggest costs going forward are Social Welfare and Public Sector pay and pensions.

This just isn't correct though. The banks have been 'given' over €66bn but about half of that was in the form of promissory notes. These are IOUs given to the banks (Anglo, INBS and EBS) by the government on which we must pay several billion euro in interest each year. The bailout is a long, long way short of being paid for.

woodoo

Head The Wall wrote: »

I don't agree that we need to replace those revenues, we should look to reverse some of the ridiculous growth in expenditure that took place over the boom years. Yes tax increases are needed but sort out spending alongside it, the CPA is saving feck all and the last implementation body report was torn apart here.

Untrue

Cork boy 55

The far-left are using it to advance their cause.

C81

no... people have to take a stance with these taxes, whilst E100 is manageable for most its the what next????? is the problem. when the next improved house tax comes through there be a bigger out cry.. i think people are not compplaining enough. whilst i acknowledge we all must pay our bills.. the Government included inEurope ,a stance must be seen... there will be the day when the country will crack, and civil disturbance will overflow onto the streets.. this is only when the government will listen. small or no protests/ civil disturances mean that people can afford these cuts.... when they escallate the gov will look elsewhere.until that, they are going to keep on taking...

n97 mini

BornToKill wrote: »

This just isn't correct though. The banks have been 'given' over €66bn but about half of that was in the form of promissory notes. These are IOUs given to the banks (Anglo, INBS and EBS) by the government on which we must pay several billion euro in interest each year. The bailout is a long, long way short of being paid for.

The lump sums have already been put into the banks and going forward it's not one of the bigger heads of expenditure. Also, in comparison to paying SW and PS the terms are somewhat flexible.

Dob74

We need to get a grip of reality.
The best way to pay for local services is to have local taxes.
At the moment we only have taxation from central gov which cant keep track of things like 3.6 billion.
Time to suck it up and pay local taxes. Then we can demand better local services.

ardmacha

The property tax is a restructuring of tax away from an unsustainable reliance on stamp duty. It is not so much a case of paying more for services as actually paying for services that have been funded by borrowing for the last 4 years.

dahamsta

n97 mini wrote: »

zac8 wrote: »

Rent?

You haven't been keeping up with the news, have you. Tenants pay in the UK, and it's proposed by the IPOA that the same will happen here.

You haven't either, they withdrew that a few days ago.

V_Moth

Cork boy 55 wrote: »

The far-left are using it to advance their cause.

Errybody is using it to further their agenda, the same with any emotive issue. Picking out one side puts you firmly in the opposite camp.

/flawless logic

Back on topic, are we over-reacting to the tax? I dunno. I think in most cases people realise the necessity of the tax but can also see the hypocrisy of those advocating it, as well as the lack of services provided by local councils.

I think in this and in many other cases there is a lack of leadership in its most basic ways. The current crop of politicians could learn a lot by reading Sun Tzu's Art of War - the most defining principle mentioned being that a good general suffers with his troops. Something we have not seen with the current government.

TLDR; I dunno. Maybe this video will put it all in context

https://www.youtube.com/watch?v=Q0q1gCsZykg

daenerysstormborn3

What is the property tax being used to pay for though? Enda Kenny mentioned "libraries" and "fire services" in his latest BS speech. The library that is being opened in the new year nearest me has been campaigned for for years and the locals have finally managed to secure €780,000 worth of funding for it. I was under the impression that "fire services" are paid for through our insurance when they are used. If you are involved in a crash and a fire engine is called you get a bill, same goes for a house fire or any other emergency they may be called to. Will this charge now eliminate being invoiced after a car crash?

Also, €100 is only the start, will you still be saying we're acting like spoiled children when it's €1,000 and we're still getting SFA for it which is what happens with most taxes in this country, we're told it'll cover x, y and z and it just ends up lining the pockets of the already wealthy.

doomed

Of course we're overreacting. Property taxes are necessary and recognised as such in grown up countries the world over. Unfortunately in Ireland we elect people for their ability to attend funerals and tell the electorate what they want to hear instead of what they need to hear.

oldyouth

I don't want to pay it, but I will. I can't understand the sheer vulume of people who think our debts will go away as long as we keep ranting on about who caused this mess.

Two points.

1) Ability to pay. Who will decide what each individual will contribute? The Revenue Dept? That will cost more to admimister than it will bring in. Does ability to pay mean after buying fags for the week or repayments for a bigger car than you need?

2) Value of your home. Any economist will tell you not to consider your home as an asset. You have to live there and it doesn't earn you an income. Many old folk have found that their home has increased dramatically in value by accident of popular location. Why should they pay more than me?

Fixed charge for me is the appropriate solution, or Mr PAYE worker will be shafted again

Bullseye1

I'm not sure if there was Stamp Duty in NI but for those people who have bought a new house during the height of the boom I'm sure they feel they have paid a very large property tax already which was based on boom prices. Many of these houses are now only worth 50% of what they paid.

In principle most people would except the need for a more secure tax intake and property tax is one way of ensuring this. If it is a genuinely fair system where people pay less for their principle residence than a second or third investment home then most will accept it in the long run. Location should also form part of the calculations and proximity to public services.

senordingdong

Is stamp duty not a sort of a property tax?

Bullseye1

Of course it is and so was the VAT on material and builders fees.

femur61

woodoo wrote: »

I think we are over reacting. Most EU countries have some form of a property tax. In the long run it will be good for this country. Sustainable income for the government unlike stamp duty etc. But i'd like to see the money go to local government (after its reformed of course).

Yes, we do need a property tax - like every country in the world. I think pain should be felt everywhere. While so many, if not all of the PS, are protected by the CPA, I feel the ordinary person is paying for this. We've too many TDs with unsustainable salaries and pensions.

Please remember and understand we're a small nation, hence small tax intake with absolutely ridiculous wages, for all, not just PS but sheltered professions as well.

luckyfrank

It's not a property tax though, it's an anglo irish tax

Cookie_Monster

what gets me about this is that water and bins still have to be paid seperatly apart from this, basic stuff the council should be providing in return for this tax, among other services...

senordingdong wrote: »

Is stamp duty not a sort of a property tax?

no, it's a transaction tax.

tayto lover

FreudianSlippers wrote: »

We're not only over-reacting, we're acting like a bunch of spoiled babies. It's a laughably low tax comparatively and we need it.

Wait till you're in your Freudian Socks in a few years time because it will grow.

Head The Wall

woodoo wrote: »

Untrue

Good rebuttal, have you got some figures to back up your claim.

dahamsta

oldyouth wrote: »

I can't understand the sheer vulume of people who think our debts will go away as long as we keep ranting on about who caused this mess.

You must think people are very stupid, or believe in fairies, or both. Until something is actually done about those assholes, we have every right to rant. NOT ranting is playing into their bull**** "that's all behind us now" meme.

EDIT: I love the "sure it's a low tax" comments by the way, are ye actually serious; seriously, that thick? Do ye not read the news? The preliminary report wants to impress the troika by bringing it forward by a year, and pegging it at around €850 or thereabouts for the majority of homes. That's in Year ONE.

slimjimmc

pixiebean22 wrote: »

What is the property tax being used to pay for though? Enda Kenny mentioned "libraries" and "fire services" in his latest BS speech. The library that is being opened in the new year nearest me has been campaigned for for years and the locals have finally managed to secure €780,000 worth of funding for it. I was under the impression that "fire services" are paid for through our insurance when they are used. If you are involved in a crash and a fire engine is called you get a bill, same goes for a house fire or any other emergency they may be called to. Will this charge now eliminate being invoiced after a car crash?

Also, €100 is only the start, will you still be saying we're acting like spoiled children when it's €1,000 and we're still getting SFA for it which is what happens with most taxes in this country, we're told it'll cover x, y and z and it just ends up lining the pockets of the already wealthy.

That €780,000 the locals secured, impressive as it is, (how much of that was secured from state bodies) is unlikely to keep the library running for long, it probably won't even cover all the initial costs.

The Fire Service is not paid for by those who use it, they only pay a small contribution to the overall the costs. Don't forget that fire engines spend a lot of time waiting for a call and there are still major costs involved... station has to be built, heated and supplied, tenders have to be purchased and maintained, fuelled up, permanent and retained staff paid and trained and re-trained. The nominal fee you pay for them putting out your chimney fire won't cover the costs of that call out.
http://www.citizensinformation.ie/en/government_in_ireland/security_and_emergency_services/fire_services.html

daenerysstormborn3

slimjimmc wrote: »

That €780,000 the locals secured, impressive as it is, (how much of that was secured from state bodies) is unlikely to keep the library running for long, it probably won't even cover all the initial costs.

The Fire Service is not paid for by those who use it, they only pay a small contribution to the overall the costs. Don't forget that fire engines spend a lot of time waiting for a call and there are still major costs involved... station has to be built, heated and supplied, tenders have to be purchased and maintained, fuelled up, permanent and retained staff paid and trained and re-trained. The nominal fee you pay for them putting out your chimney fire won't cover the costs of that call out.
http://www.citizensinformation.ie/en/government_in_ireland/security_and_emergency_services/fire_services.html

I'm not just talking about chimney fires, I'm talking about invoices upwards from €1,000 if they are called to the scene of a crash.