Property and Taxation




Sir, – Harry McGee argues that the opposition attitude towards property tax in Ireland is unusual in European terms (Analysis, 3 June). Could it be because our opposition is not made up of socialist parties but of purely populist parties? – yours, etc.,

BRENDAN O’REILLY,

Portlaoise,

Co Laois.

Sir, – Dr Tom McDonnell of the Nevin Economic Research Institute, quoted by Harry McGee, says he “was 100 percent in favor of a property tax” and that the “problem with. . . a wealth tax rather than a property tax, (which) excludes the main private residence, it is (that) the residence represents the major part of the wealth ”. There is a fundamental flaw in this analysis. The wealth accumulated in a home is the current market value less the current mortgage, which could be, and in many cases is, negative. Property tax is levied on the current market value only and therefore may be payable on a house that has no wealth attached.

In addition, Irish property tax does not take into account all land attached to a property over one acre, even if it is only for amenity. This means that homes on large amenity lots are totally undervalued compared to urban dwellings. In addition, this makes it very difficult for Revenue to question these real estate valuations for sale; the house and land sold together may earn much more than the owner’s appraisal, but who can say how much the house on an acre would earn?

The right approach to taxing the wealth accumulated in a home is of course to amend the laws on capital and inheritance tax, including removing the tax exemption on profits from the sale of a private primary residence.

Dr McDonnell also writes that property taxes are “a great way to fund local government.” However, it is clearly unfair that only homeowners pay for these services while the whole community benefits. For example, a house with a single employee of € 50,000 will pay the same tax as the neighbor with four employees of € 50,000 each, but all are entitled to the same services. Property tax has been an anachronism since the days when real estate property brought privileges such as voting, and until recently the right to compensation payable by the taxpayer for malicious damage to that property. We now live in a society with equal rights and should all pay for services within our means. – yours, etc.,

DONAL McGRATH,

Greystones, County Wicklow.

Sir, – With so much talk about property tax, it will be a nice change to hear the Irish brag about how low their homes are. – yours, etc.,

BRIAN O’BRIEN,

Kinsale, Co Cork.

Sir, – We can to some extent agree with the statement in your editorial that the local property tax is a “sustainable source of funding for local communities” (“An efficient and progressive tax”, 3 June) .

However, for many people, especially the many residents’ and business associations and clean city committees that now look after the environment of their neighborhood and pay for their garbage collection, the real question is to which ones? services does this tax finance. Over the years, the powers of local authorities have been severely curtailed by successive governments as the current system is routinely portrayed as an overly centralized system with almost total dependence on funding from the public treasury for crucial areas such as housing for local authorities. Indeed, most of the important decision-making powers of elected councilors have been ceded to civil servants and full-time professionals. Local political decisions are mostly influenced by local TDs and are mainly driven by national policies rather than local needs. Despite this, we are still funding the salaries and allowances of 949 advisers at an annual cost of over 33 million euros. Perhaps this is where the focus should be now. – yours, etc.,

MARTIN McDONALD,

Terenure,

Dublin 12.



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