Two weeks before new property tax is announced ? NAMA Wine Lake

November 19, 2012 by namawinelake

The IMF thinks it should be levied at yearly 0.5% of a home?s market value, Minister for Finance Michael Noonan indicated that it will be closer to 0.25% and because the IMF was using out-of-date figures for local authority rates and stamp duty, the view on here is that it should be closer to 1% of market value to bring our property taxes in line with OECD countries.? And the betting on here is that by 2015, it will be closer to 1% than the 0.25% hinted at by Minister Noonan. But for 2013, when Budget 2013 is announced on 5th?December 2012, you can probably expect an average property tax of ?300-500 equating to about ?500-600m in a full year, and given the necessity of having some exclusions and waivers and the ending of the ?70m second home levy and the cost of administration, it is more likely to be an average of ?400-plus on a ?160,000 home with a 0.25% flat rate apply to bands of property values eg less than ?50,000 to pay ?125, home valued between ?100-200,000 to pay ?500. The Government has signaled that the new tax will be collected from mid-2013 but don?t let that fool you into thinking you?ll get a 50% discount in 2013, you?ll have the pay the full annual sum by the end of 2013!

Of course, it could also be zero if the Government follows the suggestion by Fianna Fail to substitute other measures for the property tax, but given the minimum ?3.5bn size of the adjustment in 2013, the specific inclusion of a property tax in the Memorandum of Understanding with the Troika and the political capital already expended on the household charge, it is a safe bet that there will be a property tax in 2013 and that it will be an average of around ?400.

It is understood the so-called ?Expert Report? which was produced by a group led by quango-king Don Thornhill was delivered to Minister for the Environment Community and Local Government, Phil Hogan in July 2012 before the Dail summer recess, but it has remained under tight wraps since. It is unlikely to contain any surprises, this is generally going to cost you a few hundred euro a year and it will be a new tax, notwithstanding the fiasco of the 2012 household charge, which according to the Local Government ?Management Agency has not been paid by more than 600,000 households at the end of October 2012. Preparations are already advanced to have the once-feared Revenue Commissioners ? those nice people who agreed a ?2.1m tax settlement with Deputy Mick Wallace that might be paid off, at Mick?s discretion it should be said, over the next 50 years ? collect the tax and it may form part of your tax code if you?re on PAYE; the Government has been seriously rattled by the resistance to the ?100 household charge in 2012 and at this late stage of the year, there still appears to be widespread non-compliance.

There are various groups of opponents to the new property tax ranging from those objecting to any form of property tax at all, to those advocating different means of levying the tax and the account that should be taken of factors such as location and size of the property and site to the income of the householder.? Given the bluntness that has characterized this Government?s term in office, you can probably expect a bald 0.25% charge in 2013 based on a band of values assessed by your local authority working off your registration information provided when you paid the 2012 household charge.

In terms of alternatives, we have Property Industry Ireland who submitted its lightweight pre-budget document on 1^st October 2012 which simply called for general clarity and also a reform to property taxation, particularly with commercial rates. Last week, upmarket estate agents Lisney produced its own pre-budget submission and called for a flat rate based on bands of values but then adjusted for size. Lisney also wants to see residential stamp duty reduced or abolished. ?The Society of Chartered Suveyors in Ireland has produced its pre-budget submission and a separate submission on property tax where the Society appears to advocate a flat tax in the short-term though it is unclear precisely what its preferred option is for a permanent property tax. ?An updated submission from the Society was made in September 2012, but it again refrains from recommending a prescriptive method, save to say values should be self-assessed. The Dublin Chamber of Commerce is advocating a rate set by the 34 local authorities which will obviously benefit Dublin households where the concentration of population will lead to lower average household bills.? For all the submissions, it is likely to be a simple national tax at 0.25% of the upper band value as calculated for your home by your local authority and payable from July 2013.

Posted in House Price Database, IMF, Irish economy, Irish Property, Politics | 2 Comments

Source: http://namawinelake.wordpress.com/2012/11/19/two-weeks-before-new-property-tax-is-announced/

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