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 makingthem 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’sstill hard to swallow of course, but easier to cough up than a tax whichblatantly favours one group over another.

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

Peopleon fixed incomes in tiny apartments in Dundrum and Dun Laoghaire pay far morethan those in Dallas style ranches in Donegal or Doolin. Those on fixed incomesin Ballinter, Churchtown and Clontarf wonder why they are subsidisingmulti-bedroomed mansions in Carlow and Kilkenny.

Thereare many Dublin homeowners currently terrified that the Mandarins in theFinance Departments’ plan to hike property taxes will prove an expense too far.The dysfunctional housing market has caused property prices to rocket. Andpeople in Stillorgan and Stepaside, Clondalkin and Cabra, as opposed to thosein 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 contributemore taxes to the exchequer.’  And yes. Prices have risen significantlysince the recession.

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

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

Asa member of the Independent Alliance I support full exemptions from LPT forthese homeowners as well as a cap on LPT liabilities to ensure that no otherhomeowner pays a single Euro more in LPT than they are currently paying. Not asingle Euro more.

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

This is outrageous. Stayingin the community, beside friends and family is extremely important for thewelfare of our older people – and indeed for the exchequer. That is why theIndependent Alliance have agreed with the Ministers for Finance and Housingthat the “Abhaile” Pilot Project, which gives renovation grants to developupper apartments in larger family homes, be extended nationwide.

 This provides two practical and positiveoutcomes. A person on a pension can stay in their own home with a secure rentalincome – and young people can find accommodation at affordable prices. It’s awin-win project that has been lauded by economists for its practicality inactually 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 punitiveinheritance tax regimes in the EU and the recent increase in property pricesmeans that many children will not be able to live in the home they grew up in.

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

Peopleneed 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 callon if you need it. It also means knowing your home will be taxedproportionately, that you won’t be forced to cough up extra LPT you can’tafford, and that your children won’t be punished with massive inheritancetaxes.

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

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

 It’s only fair.

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