THE PROPOSED PROPERTY tax will raise around €500 million in annual revenue, three times more than the new household charge will bring in, the Taoiseach Enda Kenny has said.
Although the household charge has yet to come into effect plans are already in the works for the new property tax to replace the flat payment of €100 annually which will fall due in the New Year and is expected to raise €160 million for the Exchequer.
The rates of the new property tax will be determined by an expert group to begin work in January and expected to make recommendations within three to four months. Although it will be a graduated tax, the Irish Indepdendent reports that it will cost households €312.50 each on average.
It has been widely suggested the tax could be based on the recommendations of the Commission on Taxation report in 2009 where taxes would be based on the value of the property and range from €188 per household at the low end to €3,125 at the top of the scale.
“We have introduced a special group to report to the minister by the end of March on the structure of the property tax and how that will be based,” Kenny told RTÉ News, while also stating that it could be collected directly by local councils rather than central government.
He said the measure will aim to bring in funds “of the order of half a billion”.
Although the household charge was expected to be in place until 2014, the government has indicated the new property tax could come into effect as early as 2013.
The increase of €340 million in revenue that would bring would make up one-third of the government’s EU-IMF bailout target to increase tax intake by €1.1 billion for that year.