Minister defends new €100 charge ahead of full property tax

HOUSEHOLDS FACE hundreds of euro in new charges, starting with a flat-rate charge in January and separate water and property charges by 2014.

Minister for the Environment Phil Hogan said a €100 annual “household charge” would become operable from January next year for two years, ahead of the introduction of a full property tax, based on site valuations, in 2014.

Mr Hogan also confirmed a new State utility company, Irish Water, would be set up in the autumn to oversee the process of installing meters in all domestic dwellings. That would pave the way for domestic water charges based on usage in two years’ time, he said.

The new charges will be the first local taxes to be introduced for more than 30 years, since the new Fianna Fáil government led by Jack Lynch abolished domestic rates in 1977. The Minister contended the charges would reintroduce a great deal of autonomy to local authorities to finance their operations.

Only 250,000 households, some 14 per cent, will be exempt from paying the charge. They include people in social housing owned by local authorities, families in receipt of mortgage-interest supplement and people living in nursing homes or mental institutions. Those in mortgage arrears, State pensioners and those in receipt of social welfare will be required to pay the tax. Householders will be expected to declare their liability to tax in the same manner as the second home tax. Some 1.6 million households will have to pay the charge.

At a news conference, Mr Hogan accepted the tax would cause hardship to some families, but presented it as the minimum possible charge he could have applied, saying it would cost “ a modest €2 per week”.

“I think that people are suffering and are under pressure. I am obliged to introduce it but have done it at the lowest possible level to ensure provision of essential local services.”

Opposition parties derided the new charge as an unfair and punitive tax that would affect the most vulnerable in society. Fianna Fáil’s Niall Collins was highly critical of its flat-rate nature. Similarly, Sinn Féin’s Aengus Ó Snodaigh said its “seeping nature” would affect some of the poorest families in the State.

The United Left Alliance said it would organise a nationwide boycott of the tax. Socialist Party TD Joe Higgins claimed the charge could rocket to €500 in a short time. His ULA colleague Richard Boyd Barrett said it charged the richest people the same rate as the poorest.

Households which own second properties, including holiday homes and rented properties, will be required to pay the household charge for each property. That will mean a family with a holiday home will pay a total of €400 per annum – a €100 household charge for each property and a €200 second-property levy.

Those who fail to pay on time will pay a penalty of €10 a month. The legislation for the charge will include further details of penalties, including a possibility of imprisonment for persistent failure to pay.

Asked about the threatened boycott campaign by the Opposition, Mr Hogan insisted it would have to be paid, saying the charge would become “the law of the land like every other charge”.

Mr Hogan defended the charges as “essential” in ensuring the continuation of local services such as street maintenance, waste services, libraries, park maintenance and leisure facilities. The Government was obliged to introduce the charge as part of the agreement between the previous coalition and the IMF and the European Union.

“I would prefer not to have introduced any charge,” he said. “I was obliged to because of the loss of sovereignty and the programme with the EU and IMF.”

The flat charge would remain in place for two years until the Government had completed site valuations on all domestic properties in the State.