28 Oct 2018

A tax on all your houses

Taxes. None of us want them, but we can’t do without them. The challenge is making them fair. So, what’s a “fair tax” when it’s levied on you? It’s one that’s “proportionate”. A proportionate tax is a fair tax.

It’s still hard to swallow of course, but easier to cough up than a tax which blatantly favours one group over another.

 This might be the reason why local property tax (LPT) is hated in many parts of Dublin. It’s seen as being grossly unfair – it’s disproportionate.

People on fixed incomes in tiny apartments in Dundrum and Dun Laoghaire pay far more than those in Dallas style ranches in Donegal or Doolin. Those on fixed incomes in Ballinter, Churchtown and Clontarf wonder why they are subsidising multi-bedroomed mansions in Carlow and Kilkenny.

There are many Dublin homeowners currently terrified that the Mandarins in the Finance Departments’ plan to hike property taxes will prove an expense too far. The dysfunctional housing market has caused property prices to rocket. And people in Stillorgan and Stepaside, Clondalkin and Cabra, as opposed to those in Sligo or Clare, may be punished for this.

‘But’, I hear you say, ‘surely people lucky enough to own a home should be delighted to contribute more taxes to the exchequer.’  And yes. Prices have risen significantly since the recession.

However, that’s only cash in your pocket if you have little or no mortgage and plan to buy smaller. Most families are staying put. Crucially, many couples who bought at the height of the boom are still stuck in negative equity – unable to move on. They will be crucified if taxes rise.

Then there are those on fixed incomes – people with disabilities and older people on pensions. Many can just get by as it is. A raise in property tax could mean they have to leave their homes. How does that help the housing crisis?

As a member of the Independent Alliance I support full exemptions from LPT for these homeowners as well as a cap on LPT liabilities to ensure that no other homeowner pays a single Euro more in LPT than they are currently paying. Not a single Euro more.

But what about solitary pensioners living in empty nest family homes? There has been misguided and frankly offensive commentary about how elderly people living in their family homes should move out to make room for younger people.

This is outrageous. Staying in the community, beside friends and family is extremely important for the welfare of our older people – and indeed for the exchequer. That is why the Independent Alliance have agreed with the Ministers for Finance and Housing that the “Abhaile” Pilot Project, which gives renovation grants to develop upper apartments in larger family homes, be extended nationwide.

 This provides two practical and positive outcomes. A person on a pension can stay in their own home with a secure rental income – and young people can find accommodation at affordable prices. It’s a win-win project that has been lauded by economists for its practicality in actually tackling elements of the housing crisis pragmatically.

Similarly, landing children with hefty – and often unaffordable – inheritance tax bills, is deeply unfair and counter-productive. Ireland has one of the most punitive inheritance tax regimes in the EU and the recent increase in property prices means that many children will not be able to live in the home they grew up in.

In the 2016 Programme for a Partnership the Independent Alliance committed to increasing the Band A inheritance tax threshold to €500,000. This year Fine Gael insisted that there would be no change but we managed to push through a modest, but important increase despite that and I promise to continue to push toward our aim of €500,00.

People need to know that they can afford to stay in the homes they worked so hard for. People need to feel secure in their own houses.  That doesn’t just mean knowing you have a working Garda Station to call on if you need it. It also means knowing your home will be taxed proportionately, that you won’t be forced to cough up extra LPT you can’t afford, and that your children won’t be punished with massive inheritance taxes.

Owning a home shouldn’t be luxury which can be tapped for tax at will. It’s hard enough paying off a mortgage without the worry of further taxation. If we want LPT to be a fair tax, those on fixed incomes should be exempt and those already paying LPT shouldn’t pay another Euro more.

This is what I believe and support and fight for.  This is what the Independent Alliance supports. And this is what we will work to persuade our colleagues in government to support.

 It’s only fair.

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