‘Deferral’ piles debt upon debt

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HARDLY a day passes without calls from people worried by how the property tax will affect them. They are struggling to pay mortgages; battling negative equity; frustrated by how much they paid in stamp duty; or are beset by all three problems.

Their stories are harrowing but, as I have been discovering, they are not the only ones. “Is it true,” an elderly lady asked me, “that the Revenue Commissioners can go into your bank account to take the property tax?”

“Yes, it is,” I replied.

“Even if the only savings you have there are to pay for your funeral?”

She continued: “Then I pray to God that he keeps me alive to the next election.”

It was a very candid summation of just one more of many flaws in the misleadingly named: Finance (Local Property Tax) (Amendment) Bill 2013. While much of the debate has rightly focused on the problems faced by those at the younger end of the scale, there are very many others who will also find it impossible to pay this ill-judged, badly targeted and wholly ill-timed tax. A property tax that does not recognise people’s ability to pay is not only a blunt instrument: it is totally unworkable.

Unlike Enda Kenny, I won’t go as far as calling it immoral. That was his opinion in 1994 when he declared: “It is morally wrong, unjust and unfair to tax a person’s home.”

But back to this Fine Gael/Labour property tax bill – not only does it disregard means; it also establishes a “snitcher’s” charter. In addition to making it an offence for the seller to undervalue their property, sections 5 and 35 make it an offence for the purchaser not to report them if they suspect they have. Fail to do that and you get landed with a fine of €500.

Do we really want to stitch a snitcher’s charter into our tax code? How does this sit with the Revenue’s commitment that: “you can expect to be treated as honest in your dealings with Revenue unless there is clear reason to believe otherwise.”

But the flaws don’t end with this. While Government TDs enthusiastically pat themselves on the back for exempting houses owned by charities and homes blighted by pyrite, did it ever occur to them that no one with the slightest cop on would have included those in the first place?

As for the supposed deferrals, how much of a relief is a “deferral” that carries a 4 per cent per annum interest rate?

Not only is it not a genuine deferral, the Section 133 provisions are so convoluted as to render them worthless. To quote the explanatory memorandum, it: “. . .provides for the possibility of a deferral for liable persons who cannot without excessive hardship pay local property tax . . . as a consequence of a significant and unexpected financial loss or expense”.

But how can you prove this? If a pensioner has to pay out €2,000 in 2014 for a boiler replacement, does this qualify as a significant and unexpected expense?

If it does, then does the Government expect that they will be able to pay the tax on the double the following year, plus an extra 4 per cent? If they can’t do that and need another deferral, then how does it expect them to pay on the treble the following year plus an extra 12 per cent?

It is a recipe for permanent debt. You can only conclude that the FG/Lab approach to property tax is that there is no such thing as an inability to pay. Small wonder they want to keep the Dail debate as short as possible.

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