FF delegates reject motion to abolish property tax

Fianna Fáil delegates have voted down a proposal that the party in government would replace the property tax with a site valuation annual charge.

During a debate on finance at the party's ardfheis in the RDS the membership rejected the proposal from Dublin North West, Kildare North, Cork North West and Dublin South Central constituencies.

The motion said the party “believes that when returned to government Fianna Fáil should abolish the current model of property tax and replace it with a site value-based model that takes account of ability to pay”.

Finance spokesman Michael McGrath urged delegates not to support the motion because it “would tie our hands” in any possible discussions on entering government.

Mr McGrath said afterwards it would “amount to us saying we would move to another form of property tax when we are currently opposed to any property tax”.

He acknowledged there were some advantages to the site valuation tax, which values the underlying land on which a house is built. Mr McGrath said such a tax would not disincentivise from refurbishing their home or upgrading it or preventing dereliction of a property.

Under the current system if a homeowner improved the property it would increase the value and move it into a higher tax band.

But he insisted the party did not want to have its hands tied, committing it to any property tax, three years ahead of an election and any possibility of coalition talks.

During his speech to delegates Mr McGrath said the party had a duty to hold the Government to account, “not in a negative or destructive way as others seek to do, but in a way that is about putting the country first”.

That was why the party supported some issues including the fiscal treaty referendum and the liquidation of the former Anglo Irish Bank. "But we oppose the Government where we believe they are getting it wrong, on their budget choices, on their handling of the mortgage arrears crisis and on the unfairness of the property tax."

Highlighting the Government's pre-election pledges, he said Fine Gael promised no annual property tax on the family home, while Labour said it would have to take account of stamp duty paid, negative equity and mortgage arrears. But the coalition "pressed ahead" with the tax and "ignored the fundamental issue of ability to pay" and it had failed "the basic test of fairness".

He also accused the Government of deliberately singling out low and middle-income families to take the brunt of their two budgets to date. “Independent analysis has shown that Fine Gael’s budgets have hit those who can least afford it, the hardest.”

October’s budget would be the seventh tough budget in five years. People were weary of all the tax increases and spending cuts and the Government had not got the balance right between reducing the deficit and investing in the economy.

He told delegates he had a message for the Government: “Fianna Fáil accepts responsibility for mistakes made in office but you’re in government now for over two years it is well past time you accepted the responsibility that comes with being in power.”