Madam, – It is beyond me why the so called National Competitiveness Council (Business This Week, June 26th) has gone outside of its remit in proposing a property tax. Surely any proposal to increase tax and therefore increase competitiveness is an oxymoron.
Furthermore, they appear to fail to understand the four maxims of taxation being equity, certainty, convenience and efficiency.
They propose a property tax as a substitute for stamp duty (which meets all of the four maxims, if you accept that any tax can be deemed to be convenient ) and that it is to be based on the “value” of a property.
It should be noted that in most cases a property is paid for out of already taxed income, plus stamp duty, plus VAT on the materials to build the property.
How do they propose to ascertain the value of a property in the current environment with the huge oversupply and the impending establishment of Nama?
How for example is a five-bed in need of refurbishment to be compared to a three-bed recently refurbished to a high standard?
Surely one can only establish true value when a sale occurs.
If the property value has increased from the original inflation adjusted price the tax paid should, if any be paid on the net differential less the original stamp duty paid.
This would be fair.
Are they proposing a tax based on the original purchase price (adjusted for inflation) less the original stamp duty paid less the amount of the outstanding mortgage?
How do they propose to apply the tax where negative equity exists?
Will the Revenue be issuing rebates for negative equity? What about the anomaly of a young family with mortgage versus an elderly couple with little or no mortgage?
For the sake of clarity, my comments only apply to principal private residence. Given that a tax on additional properties is to be levied at €200 can one assume that any proposed additional tax on principal private residences will be less than this?
This tax will not be efficient (just like its predecessor) and given the current environment will further depress property prices, the number of transactions and ultimately will be counterproductive. – Yours, etc,
Madam, – Michael Healy’s letter (June 29th) on domestic residences is erroneous.
In June 1977 the outgoing minister for local government James Tully TD, issued a Ministerial Order removing the requirement to collect rates on domestic dwellings.
The rateable valuation of domestic dwellings never ceased in either law or practice.
The Minister for the Environment has only to issue a new order reinstating the assessing of a rate and the collection of same by the appropriate authority.
The Irish tax-payer should insist any taxation by local councils is controlled by elected councillors and not by unelected officials who are not responsible to anyone. – Yours, etc,