Ireland To Bring Forward Property Tax

by Jason Gorringe, Tax-News.com, London

22 December 2011

Facing a possible boycott of the new Household Charge, the Irish government looks set to replace it sooner than anticipated with a full property tax, a year earlier than originally planned.

It is now believed that the controversial EUR100 (USD131) annual levy will be scrapped in favour of a comprehensive property tax in just over a year. The government, under its bailout commitments to the European Union (EU) and International Monetary Fund (IMF), must introduce the tax in 2014. The Household Charge is to act as an interim tax in the meantime, and will become effective in January.

The Irish Times has reported that ministers intend to accelerate the implementation process by establishing an expert panel, which will provide recommendations on a new property tax regime in April next year. The aim is to have the system operational by 2013, taxing properties on a graduated scale, taking into account size or value.

The Household Charge is expected to raise EUR160m USD210m) in 2012, but has earned the government considerable criticism. It faces calls for a boycott, led by rebel lawmakers who have urged taxpayers to refuse to pay the levy. Prime Minister Enda Kenny has defended the charge, arguing that it amounts to just EUR2 per household, per week. However, his opponents have accused him of intimidating householders with threats of court action and substantial non-payment fines.

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