Is the property tax the final insult to people who have worked all their lives to buy a house where they assumed they could live out their days? Up until now you could have the electrics switched off and the bins uncollected, but you would still have a roof over your head. One you chose, one you paid for. Now even this is under threat. For most people getting the electricity switched back on again is achievable, but if you lose your home there is a good chance that you will never own another one, and could become dependent on the State - and how is this going to help? The new €100 property tax will be affordable for most people, but no-one knows how high it will go, or how it will be calibrated in future to take account of property/site values and ability to pay. There is even a proposal that unpaid property tax could be collected from the estates of dead people or when a house is sold. Apparently elderly people living in their own homes could be an (in) 'efficient use of land'. This could be the final straw that destroys communities all over Ireland.
Imagine a little street in Dublin (with apologies to David McWilliams). A street of old redbrick houses, well-kept, in a nice area, where a property tax or site valuation tax would be quite high. Who lives there?
NB: any resemblance to real people is entirely accidental.
No 1 : Michael and Mairead and their four children. Mid 30s, they both had highly paid professional jobs and bought their family home in 2004. Mairead stopped working after the birth of child four as the childcare cost too much and now Michael's salary has been cut. In serious negative equity, they are barely able to manage the mortgage. Will the full property tax push them over the edge? Will their home be repossessed?
No 2 : James and Mary and one of their five grown up children. They are retired civil servants in their early 60s whose pensions are not nearly as big as their neighbours imagine. James enjoys golf and Mary is a pillar of the local community. She chairs the local resident's association, helps out with Meals on Wheels and regularly checks on her elderly neighbours. They are very worried about how they will pay all the new charges, but know that they will get no sympathy.
No 3: Ivy is in her 80s and her health is now failing. She lives on her own and survives on a widow's pension. The house needs work, which she cannot afford, but she fiercely values her independence. Mary delivers her meals every day and Ivy knows she can ring her at any time. Ivy is very worried about the property tax. Will she be able to pay it? Can the Government take her house if she doesn't - as happens in the US? Or will her children lose out?
No 4: Margaret is separated with two teenage children, who are great friends with some of the kids in No 1. Her maintenance is just about enough for now and she minds the baby from next door, but she is not entitled to any means tested payments or waivers from all the new taxes and charges. The property tax could mean she has to move out of the family home. If she stayed and the tax becomes payable on her death, it could eat up the entire value of the house and more. She doesn't know what to do.
No 5: Sinead and Dermot are in their late twenties, both working. They bought in 2009 and can easily afford the mortgage as Sinead is self-employed so the bank would not take her income into account. Their 6 month old baby is minded by Margaret.
No 6: Brian is in his late 60s and is in excellent health, but he only has a small pension. Mary often brings him a meal and cleans up. He is afraid that he won't be able to pay the property tax and that his children will try and make him sell up so they don't lose their inheritance. Who will help him if he has to move?
I know that property taxes are paid elsewhere, but this is a NEW tax and it could become a very substantial cost that people cannot avoid paying from incomes that are already squeezed. So what can be done? There is a non-pay campaign underway, but with a proposed fine of €2,500, many will pay the €100 because they cannot afford to risk a fine of that size. Then there's the 'penny protest'. Well I'm calling it that and it's actually about cents rather than pennies, but basically it involves paying the €100 in cents, on the last day, in person. I rather like that plan, but if anyone has any better ideas, I'm willing to listen...