Hogan hits Bill for more money. The private rental sector is being hammered. Mortgages up, rents down, capital value down >50%, property tax €300 per year now.

Hogan announces €100 Household Charge to fund vital local services in
our communities

Ireland is one of the last western countries to fund local services
through a local charge

The Minister for Environment, Community and Local Government Phil
Hogan TD today (Tuesday 26th July 2011) announced the introduction of
a Household Charge of €100 to fund vital local services in line with
the requirement in the EU/IMF Programme of Financial Support for
Ireland.

Speaking following Cabinet approval of the Household Charge, Minister
Hogan said: ‘In line with the EU/IMF agreement, the Government has
approved the introduction of a Household Charge in 2012. A full
property tax, requiring a property valuation system, will take time to
implement, so I am introducing an interim charge of €100 which is to
be applied to the majority of households in the country, payable from
early 2012.’

“If we want to continue to have the level of local services we expect,
such as fire and emergency services, well maintained streets, public
parks, waste services, libraries, open spaces and leisure facilities,
we have to be willing to contribute towards paying for them. We expect
to raise in the region of €160 million through the Household Charge
which will be used to directly support the continued delivery by local
authorities of these vital services.

“I understand that the introduction of the charge, even though modest
at less than the equivalent of €2 a week, represents an additional
cost for all homeowners so I intend to facilitate households in paying
it over a number of instalments. I have also sought to protect the
most vulnerable in society by excluding those on mortgage interest
supplement. Those in certain unfinished housing estates will also have
the charge waived.

“It is internationally accepted that local services are administered
by local authorities and financed by local service charges. Ireland is
now moving along a path to a local and sustainable funding base for
local government. Effective local governance requires strong local
decision making. This new funding system for local government will
continue to allow local authorities to prioritise expenditure to meet
locally identified needs as part of the local authority’s budgetary
process, making for a more efficient, accountable and effective
funding system. This is local democracy in action.”

Notes:

The Memorandum of Understanding with the EU and IMF commits
Ireland to the introduction of a property tax for 2012 and to an
increase in the property tax for 2013.

The introduction of the Household Charge is an interim measure and
proposals for a full property tax will be considered by the Government
in due course.
The Household Charge will be €100 in 2012 (less than €2 a week).
This charge is another step in reforming the way local authorities
are funded; it follows the introduction of the charge on non-principal
private residences (NPPR) in 2009.
Local representatives can prioritise services, making funding more
efficient, transparent and relevant to their community.
It will contribute to fund local services such as fire and
emergency services, libraries, street cleaning, lighting, planting
etc.
Up until now the Exchequer has contributed to the funding of these
services but given the current difficult Exchequer position, the
funding now needs to be collected locally through the introduction of
this charge.
It is expected to raise some €160 million – based on the number of
properties expected to be liable to the charge. The amount raised will
be dependent on actual collection rates and the costs incurred in
collecting the charge.
Every effort will be made to keep administrative costs to the minimum.
Owners not occupiers will be liable.
Monies raised will be paid into the Local Government Fund and will
be allocated back to local authorities by the Minister in General
Purpose Grants – this will ensure authorities with low population
figures will not suffer unduly as a result.
The liability date will be January 2012 and households will have
three months to pay. Late payment penalties will apply thereafter (€10
a month).

Collection Methods:

Collected by LGMA (Local Government Management Agency).
Based on the principles of the NPPR charge and its successful
collection method.
Post or website (once off or direct debit four times a year).
Four overriding principles:

1. Self declaration basis;

2. Administration costs to be kept to a minimum;

3. Late payment penalties;

4. If remains unpaid, charge will remain attached to the property –
if a property is sold the new owner becomes liable for outstanding
monies.

Exemptions:

1. Properties that are part of the trading stock of a business
(not sold or not generated an income);

2. Social housing, including voluntary and cooperative housing units;

3. Owned by Government/Health Service Executive;

4. Owned by a Charity;

5. Properties where commercial rates apply;

6. Where a person is forced to leave their house due to long-term
mental or physical infirmity (elderly person that has moved into a
nursing home).

Waivers:

1. Those in receipt of mortgage interest supplement;

2. Those in certain category 3 and 4 unfinished housing estates
(building, planning, control issues and public safety issues or where
developer not contactable and there are public safety issues).