Call for professional site valuations for property tax

A PROFESSIONAL property assessor should be used to undertake site valuations when the property tax is introduced, an economics conference heard yesterday.

Speaking at the Dublin Economics Workshop in Galway, economist Ronan Lyons said a State-wide checklist should be introduced to ensure assessors deliver comparable estimates.

Those who have their real estate assessed should be given a tax credit in year one to offset the cost, he added.

Mr Lyons rejected the idea of a full-value tax, proposing instead a site-value tax, which would take account of features such as proximity to public transport or the site’s propensity to flooding.

A property tax, which will replace the €100 household charge, is to be introduced in the budget. According to the Government’s latest submission to the International Monetary Fund and EU, the property tax will be based on house valuation rather than square footage.

Earlier, Patrick King of Dublin Chamber of Commerce and Karl Deeter of Irish Mortgage Brokers proposed an alternative approach to property tax which would link the property tax liability to local authority expenditure, based on site size.

Addressing delegates, Mr King said a nationalised property tax model did not address the issue of vertical imbalances in the local government system. “Through this system the property tax would be used to directly fund the local authority. It would be simple, fair and achievable and would have very low administration and compliance costs.”

He questioned the feasibility of basing a tax on house value in what he described as the current dysfunctional property market.

Outlining how per-square-metre tax liability could be worked out for individual local authorities using resources such as data from the Property Registration Authority of Ireland, Mr King said such a system would be equitable.

“Establishing a direct linkage between local taxation and local services has in other jurisdictions delivered a level of accountability and transparency.”

Mr Lyons said integrating the new tax into the existing tax system was also key to the effective implementation of the property tax. For PAYE workers, the property tax should be listed as an extra line in the payroll, while deduction at source should be the default position, but not compulsory. Self-employed property owners should pay through their annual tax returns, he added.