Tax is a necessary evil but a political time bomb

FEW people like the property tax, especially people who have paid off a millstone mortgage, live in a nice area, and are contemplating a prosperous enough retirement. Suddenly, the paper value of their home, which may not relate to their current income, becomes a major source of worry. Against that there are few, if any, jurisdictions across the developed world which do not have some kind of property tax, more usually to fund local services. From way back to Norman times we had the principle of domestic rates, which were abolished in Fianna Fáil’s infamous election give-away back in June 1977.

The loss of economic sovereignty in November 2010 led to the Government conceding to the supervisory Troika, of EU-IMF-ECB, that the Local Property Tax (LPT) would be implemented from 2013. It has led to an understandable outbreak of anxiety, as cited above, amid extra fears that people in urban areas may be unduly penalised, especially as property prices increase from the low levels which pertained when the tax was introduced.

Such anxieties have fed into political fears that the property tax could undo parties that are in power and implementing it. We had been guaranteed there would be no increases until 2019.

Now Finance Minister Paschal Donohoe is signalling this freeze might extend until 2020 with “moderate increases” to follow. Mr Donohoe, and all politicians, know the LPT is both a necessary evil and a political time bomb.