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Debate Room: Property tax rates are unfair on those living in South County Dublin

High and rapidly increasing house prices have meant that Dublin homeowners shoulder a high proportion of the local property tax bill.

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Fine Gael TD Josepha Madigan claims that homeowners in her constituency of  South County Dublin are being disproportionately hit by property tax charges in comparison with those living in rural regions like Roscommon.

We asked Josepha Madigan to debate the fairness of property tax rates with rural Fianna Fáil TD, Eugene Murphy.

YES. High and rapidly increasing house prices have meant that Dublin homeowners shoulder a disproportionate and unfair proportion of the local property tax bill. This issue is currently ameliorated by the government decision to freeze property valuations for property tax purposes at 2013 levels.

However, rates are due to be recalculated in November 2019 and many, particularly in my constituency of Dublin Rathdown, could face significantly increased tax rates unless action is taken. I raised the local property tax during my maiden speech in the Dáil in April 2016. It is a major issue affecting homeowners in my constituency where incomes have not been able to keep pace with significant increases in property values.

The burden of the local property tax is already causing difficulty for many families, particularly those on fixed incomes, ie pensions. If the tax rates rise in 2019 under the current system, incorporating average South County Dublin property price increases of circa 60%, the average south Dublin homeowner would face an increase in their property tax bill from €585 to €945. This would be an unfair, punitive tax increase for homeowners and must be avoided.

It was very positive to hear from an Taoiseach Leo Varadkar that he does not want to see any sudden dramatic hike in property taxes. The local property tax plays an important role in funding vital local services from housing to maintaining graveyards. It facilitates an independent revenue stream for local government. But it is essential that the local property tax burden is not concentrated too heavily on those who happen to live in areas with high and increasing property values.

Unfairly concentrated on homeowners in areas like Dublin Rathdown where house prices are high 

One proposal to alleviate the local property tax burden would be to allow local governments more freedom to adjust the local property tax rate as it applies in their localities. At present, local councils can vote to decrease (or increase) local property tax rates by up to 15% in their areas. Dún Laoghaire-Rathdown County Council voted to continue its 15% reduction reflecting our local circumstances while other councils voted for an increase reflecting their different circumstances, ie a 5% increase in Kerry.

Expanding the local adjustment factor beyond 15% would allow local property rates to better reflect the unique needs of their local areas. In areas with high property values, further reductions can be applied to reduce the tax burden while allowing the scope to raise extra revenue through local property taxation where appropriate in other council areas.

The local property tax burden is unfairly concentrated on homeowners in areas like Dublin Rathdown where house prices are high and rising fast. I hope to see this issue addressed in upcoming budgets to avoid any major tax hikes and to ensure a fairer, more equitable tax distribution.

Josepha Madigan is a Fine Gael TD for Dublin Rathdown.

NO. I believe it is disingenuous to try to make comparisons between property rates in South Dublin and rural County Roscommon. Deputy Josepha Madigan previously singled out the Roscommon constituency as an area that is not facing the same sort of pressures as her constituency of Dublin-Rathdown but her comments are somewhat disingenuous as you are not comparing like with like.

While I do acknowledge that people in Dublin have to pay high levels of property tax the simple fact is life is rural County Roscommon is very different to South County Dublin.

We don’t have the same level of services, infrastructure or public transport—we don’t have the Luas, the same level of bus and rail services and we are much more dependent on our own transport which means we are subject to additional costs of running a car and paying exorbitant motor insurance premiums.

You’re not comparing like with like

We also do not have the same level of job creation or investment and unfortunately we are not seeing the same green shoots of recovery that Dublin is experiencing so I don’t believe it’s fair that people in rural counties like Roscommon should have to pay the same property tax as Dublin as you are simply not comparing like with like.

A breakdown of 2015 IDA figures shows the FDI jobs are not being fairly spread across the country. Last September my party tabled a parliamentary question which showed that county by county data of the 187,056 people employed in IDA supported companies in 2015. Shockingly 18 counties or nearly 70% of the State accounted for less than 2% of total jobs. There were only 936 IDA jobs in County Roscommon in 2015 which only accounts for 0.5% of the overall figure.

We also have appalling broadband connectivity in County Roscommon with the county being ranked as the lowest (36%) with the number of premises served by the commercial sector as over 60% fall within the national broadband plan intervention area.

Businesses throughout Roscommon, Longford and Leitrim are also being subjected to crippling rates which is another nail in the coffin of trying to do business in rural Ireland.

Eugene Murphy is a Fianna Fáil TD for Roscommon-Galway.

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