The range of opportunities for people to pay the property tax is “very significant” and the Revenue Commissioners will only deduct at source from those who fail to pay “at the end" of the collection process, Taoiseach Enda Kenny has said.
“Going after the social welfare payment or reductions of salary” will only happen “at the end of the process,” Mr Kenny said today.
Mr Kenny said “a variety of methods,” including part-payment, would be available to all before the Revenue would “use the authority” which, he said, they have had “for very many years” to deduct at source.
Mr Kenny made his comments after the Public Accounts Committee heard that those who do not pay the property tax will have it deducted from their salary, pension or bank account.
Chairman of the Revenue Commissioners Josephine Feehily said that, those who do not opt in to one of the six payment options available to them the tax will have the tax deducted at source from their salary, pension or social welfare payment, or deducted from bank accounts held by them with an 8 per cent interest rate will apply to those who do not pay.
The Revenue Commissioners will begin sending letters including guidelines on property valuations for the property tax to 1.6 million householders from the second week in March onwards.
The letters will take four weeks to issue and will include a Revenue estimate based on average indicative value based on property values. She said the valuation was based a representative sample of prices taking into account criteria such as whether a property is detached or semi detached or in a rural or urban area and when it was built.
All those who receive letters are required to make a return to Revenue. Those liable for the tax will either indicate that they accept the Revenue's valuation on the property or provide an alternative valuation which will be grouped into €50,000 bands.
Properties exempt from the tax and householders who apply for a deferral will be also be required to contact the Revenue Commissioners indicating the grounds for deferral or exemption.
Ms Feehily told the committee that the valuation rate arrived at would remain the same until 2016. She told the committee that Revenue had acquired geocodes for every property in the country under law from a private company which used satellite technology to capture that information. She said Revenue was now matching those properties with names and addresses.
Ms Feehily said it expected that the cost of the implementation and administration of the property tax will cost €25.9 million. Although the property tax is currently estimated to cost 2 per cent of the expected yield from the tax for the next two years, Ms Feehily said it was expected that this would reduce to less than one per cent from year three onwards which would be in keeping with the administration costs of other taxes collected by Revenue.
Although Revenue had initially indicated that 100 staff would be required, Ms Feehily said today
it was now clear additional staff would be required, describing the undertaking of rolling out a tax to 1.6 million households as "colossal". She said staff would be redeployed from other departments while temporary clerical staff would also be utilised.
Ms Feehily said that, where properties were sold in future, the seller should tell the purchaser the value they had indicated to Revenue: "If [the seller] has made a significant under-declaration then the purchaser should tell us that," she said, adding that this was because the new owner will assume responsibility for the tax.
Ms Feehily said a "significant” information campaign would begin towards the end of the first week in March in relation to the tax.
Although Ms Feehily noted social welfare recipients who fell below a certain income threshold could apply for a deferral of the tax.
Sinn Féin TD Mary Lou McDonald said you didn't need to be "a mathematical genius" to figure out that those on social welfare payments would not be in a position to pay this tax "now...next year or the year after".
The Sinn Féin TD said she wished to point out the "utter lunacy" of a taxation system, under which the only relief those on social welfare can avail of is to defer this tax to a later date for which the State will levy a 4 per cent interest charge.
"There is every likelihood that you will be using mandatory instruments, taking money from people who really can't afford that tax. The whole thing is just mind boggling and it is a very, very great pity that we’ve come to this pass," she said.