A Government Minister wants lower property tax rates for those in affluent areas.
The Local Property Tax (LPT) was based on valuations of house prices after the economic slump.
Those valuations expire later this year and the property market recovery could leave families facing €500 tax hikes.
Culture Minister Josepha Madigan, a rising star within Fine Gael, wants lower rates of property tax in affluent areas like her own constituency in south Dublin when the LPT review is completed by the Government.
“I would like to see a lower rate in areas with the highest house prices. Residents of south Dublin, for example, should be entitled to reliefs as they could be most affected,” she said.
The minister was responding to last week’s Irish Independent analysis that showed some homeowners could face tax hikes of up to €500 under new property tax rates.
But Ms Madigan has been accused of showing “phenomenal bias to wealthy people”with her proposal, which will prove divisive.
Property prices around Ms Madigan’s constituency office in Churchtown, Dublin 14, have soared in value over the past five years suggesting a potential average increase of about €400 per year.
The average price of a house in Churchtown now stands at €632,000, up from €336,000 in 2013.
The LPT rate in this area could rise to €956, up from €585 in 2013.
Nationally, the average price of a home reached €256,000 in 2018 – up from under €150,000 in 2013. That suggests taxes could go from a national average of €225 to €495.
David Hall, of the Mortgage Holders Organisation, told the Irish Independent that Ms Madigan was “showing phenomenal bias towards wealthy people”.
“If there’s a pound-for-pound increase, it’s her constituents that are going to be hit hardest and it sounds like she thinks they should be exempted or should be getting some special exemption,” Mr Hall said.
“The natural line is that if people are living in more expensive houses and are naturally wealthy, the reason it’s attached to property is that all property is a different value.
“There’s no point in having it attached to property and then just pick a figure and bill everyone the same. It defeats the whole point.
“It’s politics not budgeting. General acceptance is that people in more expensive houses have more money. It’s not always the case, but it is in the vast majority of cases and she seems to be trying to favour those well off people.”
Fianna Fáil housing spokesman Darragh O’Brien said it doesn’t want any increases in property tax and said the rate needs to decrease nationally.
“It’s obvious that one area, south Dublin, can’t have a different multiplier, a different rate than the rest of the country, that’s a ridiculous suggestion,” he said.
He added that the Government needs to publish the findings of the review.
A spokesperson for the minister said Ms Madigan believed in an alternative way of calculating the property tax because areas such as her constituency will be disproportionately affected by re-calculated figures, due to the significant rises in house prices since rates were first estimated in 2013.
The spokesperson said increases could hit older people on fixed incomes and people whose incomes have not risen in proportion to house prices.
People Before Profit’s Richard Boyd Barrett said if Ms Madigan “is concerned about it she should oppose it root and branch”‘. He said her comments were made for electoral purposes.
The Government has already said the system will be changed but they have only given a general assurance that any increases will be “modest”. Officials have said a review begun last year will be published later this year.
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