The ESRI has been exploring various options for a property tax. It says a properly designed property tax would be able to exempt low-income groups like pensioners and those on social welfare, while charging more to those on higher incomes. In particular, the ESRI has been looking at what would be needed to raise the Taoiseach’s target of €500m a year for a full property tax, compared with the €160m target for this year’s flat-rate property charge. We all know property tax is coming but is there a fair way to introduce it? or will it just impoverish people that are working and all ready paying high taxes.The new property tax will be introduced in the next budget.
Property Tax purposed charges
It says an income-related property value tax could provide such a model, and would need to be set at an annual rate of €2.50 per €1,000 of house value.Under this model, the bill would
- be less than €2 a week for the poorest 30% of households,
- between €4 and €7 a week for the next 30%,
- rising to €8 to €10 for the next 30%.
- The top 10% of earners would pay close to €15 a week.
The ESRI says flat rate charges are inherently unfair, as everyone pays the same regardless of income level or property value.
Property Tax and Europe
While Europe wants Ireland to introduce a property tax like they are paying, they dont seem to realize that they get free and subsidised services as in Health, Education, Childcare and Transport. People in Ireland have to pay for these on top of already high direct and indirect taxes. The big question is where will the €500 million go?
You can Leave a comment below on how you feel about the new property tax.