Household Charge to be replaced with more equitable Property Tax in 2013/2014

The Minister for the Environment, Community and Local Government, Mr
Phil Hogan T.D., has announced that he has established a high level
and focussed Inter-Departmental expert Group to consider the
structures and modalities for an equitable valuation-based property
tax that will replace the current €100 Household Charge. The Group is
tasked with reporting back to the Minister by end-April 2012.

The Minister stressed the Government’s firm commitment to introduce a
valuation-based property tax to replace the Household Charge at the
earliest opportunity. The Minister said: ‘Ireland is one of the last
countries in Europe to introduce property-based charges to fund local
services. The tax base in Ireland needs to be broadened but the focus
must move away from taxing people’s work to lessen the impact on
growth and to support employment. The Minister continued: ‘The expert
Group is to report to me by end-April 2012 on the design, scope and
implementation of the property tax and I intend to bring proposals for
an equitable valuation-based property tax to replace the Household
Charge to Government as soon as possible thereafter.’

The Group will be independently chaired by Dr. Don Thornhill who has
relevant expertise in this area. The Group will be comprised of senior
officials from the Departments of Environment, Community and Local
Government; Finance; Public Expenditure and Reform; Communications,
Energy and Natural Resources, Social Protection and the Revenue
Commissioners. The Group may also call on technical expertise from
the Central Statistics Office, An Post/Ordnance Survey Ireland,
Property Registration Authority, the Valuation Office, the Property
Services Regulatory Authority and other individuals, organisations and
agencies as it may deem to be of assistance in carrying out its work.

The Minister welcomed the fact that over 66,000 residential properties
have registered for the Household Charge, equating to €6.6 million. ‘I
would like to acknowledge and thank those people who have registered
their properties and paid the Household Charge at this early stage.
The large numbers of people paying the charge is a clear indication of
compliance with the legislation and the acceptance that it is
necessary to fund vital local services in our communities.’

The €100 will go towards paying for essential local services: public
parks; libraries; open spaces and leisure amenities; planning and
development; fire and emergency services; maintenance and cleaning of
streets and street lighting.These services are integral to the quality
of life in local communities.

The terms of reference for the expert Inter-Departmental Group are:

To consider the design of a property tax to be approved by Government
to replace the Household Charge and that is equitable and is informed
by previous work and international experience.

The residential property tax is to:

· Meet the immediate financial requirements of the EU/IMF programme;

· Provide a stable funding base for the local authority sector
in the medium and longer terms incorporating an appropriate element of
local authority responsibility subject to any national parameters;

· Ensure the maximum degree of fairness between and across
both urban and rural areas

· Be collected centrally by the most cost efficient and effective means;

· Facilitate easy and/or phased payments by households;

· Be easily determined (e.g. on a self assessment basis), and
having regard to the information currently available (or to be made
available through registrations for the household charge) on
residential property and/or house ownership details;

The Group is also to consider the appropriate arrangements for:

A robust audit function; and
Strong enforcement and penalty provisions for non-compliance.

The Group will be assisted principally by a secretariat in the
Department of the Environment, Community and Local Government and
should report to the Minister for the Environment, Community and Local
Government by end-April 2012.