Policy makers, including the Finance Minister Michael Noonan, are preparing to implement an unfair residential property tax in the 2013 Budget.
This residential property tax will be collected on every home in Ireland. The rate you will pay, under this system, depends on the full value of your property including the building. The square footage, the number of bedrooms in your home, energy rating, are some examples of the features that assessors will use to set your taxation rate. Under this type of residential property tax, your payable tax will rise alongside any improvements you make to your home and garden. You will also pay more under this kind of property tax because the owners of development sites and zoned land are excluded.
There is an alternative, smarter and fairer tax system available, but the current government is not considering it. We are asking that this alternative be seriously considered before the 2013 Budget is implemented.
The alternative is called a Site Value Tax (SVT) and is based on land value alone.
The amenities available in a local area give zoned land and house sites their value. These amenities can include: sea views, nearby jobs, schools, public transport, shopping centres, good neighbours as well as the obvious infrastructure services of road access, connection to sewerage, water and electricity supplies. None of this value is created by the site owner but is created by nature and the broader community, both public and private. Site Value Tax is levied only on this unearned amenity value - never on the improvements made to the site by the current or previous owners. Those site owners with the most amenities, pay the highest tax. Those with the fewest amenities pay the least tax. That includes zoned land and development site owners where all of the property value is due to the amenities provided by the community. That makes it fair.
Benefits to the tax payer under Site Value Tax (SVT):
· Broadens the tax base therefore lowering the tax burden on homeowners by around 30%.
Enables reductions in tax for those who overpaid in the boom times.
· Taxpayers can see what they get for their payment in terms of the amenities they enjoy.
· Does not penalise those who energy upgrade their homes - good for the environment and the construction industry.
· Is lower for apartment owners sharing a site than under a property tax - fairer as they also have to pay service charges.
· Encourages the development of unused and dilapidated properties - which is good for their neighbours.
· Encourages the renovation and letting of empty homes - thereby reducing rents by increasing supply.
· Actively discourages land hoarding and speculation by reducing windfall gains - directing investment to productive activities.
· Actively discourages lobbying and corruption in planning - and as a result, premature and excessive re –zoning
· Enables plan-led development - thus empowering residents in their local community.
· Steadies the cost of housing and keeps it affordable.
Benefits to the Government under Site Value Tax (SVT):
· Recovers value created by public investment in infrastructure and services without impacting on construction activity.
· Taxes the wealthiest in a way they cannot avoid - there is no clever loophole escape.
· Provides a steady known income to local government - better for sustainable planning.
· Easier, faster and less costly to implement than the proposed property tax because site values for each area are easy to assess compared to individual assessments of every home in the country
· With every property owner contributing their fair share, the government will be in a position to lower taxes on labour and transactions that are a drag on the economy.
The government has refused to engage in a public discussion of what kind of residential property tax we should have. They seem to think that Irish people would not be able to understand a Site Value Tax and will not notice that developers, speculators and bankers will get another bail-out under their property tax.
Prove them wrong!
Contact the Finance Minister, Michael Noonan, to express opposition to their property tax and demand a smarter and fairer tax system in the 2013 Budget.
Make our voices heard and influence the outcome - it is not too late. Sign this petition today and make your government work for you.
- Minister for Finance
Stop the government imposing an unfair residential property tax in the 2013 Budget. We want a fair Site Value Tax in it's place.
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