Comments on: A property tax in Ireland? Yes, we can!

By: Brendan Quinn

Brendan Quinn — Fri, 20 Aug 2010 13:10:30 +0000

I believe a zoned land valuation tax would greatly benefit Irish society, contribute to a stable budget and create economic opportunities. LVT is different to property tax which in all respects makes matters worse. LVT taxes the land not the improvements to the land. LVT introduction would mean other taxes specifically, income tax, VAT and profit taxes could be reduce adding stimulus to the economy without the expense of borrowing to do and add to Aggregate demand in a meaningful way.

By: Ronan Lyons

Ronan Lyons — Mon, 19 Jul 2010 22:12:09 +0000

Hi Tom,
The problem is we need more tax revenues in from everyone either way, so – as I said above – the choice is not between a property tax or not, it’s between a property tax and, potentially very few tax credits (e.g. first €5000 only is tax free), or a higher standard rate of tax (e.g. 25%), or abolishing child benefit. We might be able to struggle on with the current system for another year or two, but by 2015 we need to have a sustainable model in place. Which of the above options is the least bad?

By: tom

tom — Mon, 19 Jul 2010 20:47:58 +0000

Dont think this is a good idea at all look at the chaos it has caused in the usa! it bad enough that there arent many jobs around for alot of people but to add an extra bill to the ones that are already studying ? this country is fine it will get back on its feet if it wasnt for the corrupt government between back handing and fattening them selves we all lose out. money in this country is very badly spent ( e.g opened mail belonging to md of my company as if the wages arent bad enough they cut them on top of that they added half an hour to each day ) enterprise ireland had sent the company a cheque for 145 k and this company made ten million profit last year thats my two sense anyway

By: Falling house prices or not, Ireland needs a property tax | Ronan Lyons

Falling house prices or not, Ireland needs a property tax | Ronan Lyons — Tue, 13 Jul 2010 08:04:52 +0000

[...] year ago, I outlined a number of reasons why Ireland should adopt an Obama-esque “Yes We Can” attitude to property taxes – as well as how to deal with issues like those who have paid a lot in stamp duty recently. [...]

By: Ronan Lyons

Ronan Lyons — Fri, 13 Nov 2009 09:30:28 +0000

Hi Larry, thanks for that comment. There has been a good discussion about what kind of property tax would prevent the perverse incentives you’re talking about and generate money, that would be used locally, but would not discourage investment in your home. Land value tax has been suggested as the best.
On the point about people living far apart, that’s an interesting one – although I guess one could argue that’s likely to be less of any issue in a country the size of Ireland. But still, it’s a consideration that needs to be borne in mind.

By: Larry Lain

Larry Lain — Thu, 12 Nov 2009 22:24:49 +0000

I currently live in the US and am accustomed to property taxes. I pay about $1000 per month for an average (or slightly above average) house in NJ. The difference here is we know and have local control over the use of the funds generated by our property taxes. In simple terms, about 75% of the funds go to support local schools. The rest is used for stuff like local libraries, local police, roads and parks, which is also under local control.
This system, while generating massive revenues and supporting the education of our children has some serious drawbacks though:-
– It discourages property improvement which increases assessed value and therefore taxes.
– It creates unequally funded schools across different communities of differing incomes.
– If forces different generations to live far apart. On retirement, retirees on fixed incomes simply can’t keep up with ever-increasing property taxes so they move to areas with fewer children and lower property taxes, typically Florida or Arizona ot places like Colorado.
– It forces us all to see a home as a liability, not an asset. The sad part is this liability is as sure as death to keep getting bigger.

By: Fergal Daly

Fergal Daly — Fri, 18 Sep 2009 16:18:53 +0000

Ronan,

thanks for getting back. What’s interesting about a land value is that no one is talking about it and any time I’ve mentioned it in company people are unfamiliar with it but agree that it seems like a useful idea – except for yesterday when it was strongly opposed by a work colleague who recommended I post a comment over here to see what you thought of it. Someone else told me that the word for me was a “Georgeist” ( http://en.wikipedia.org/wiki/Georgism ) but that it has never been implemented anywhere.

I’m pretty sure we will not get a site-value tax or anything more interesting than a blunt money-raising instrument out of the current govt or most of the opposition.

By: Ronan Lyons

Ronan Lyons — Fri, 18 Sep 2009 13:03:03 +0000

Hi Fergal,
I agree entirely with your view that we should use any property tax to achieve the biggest possible social good.
My point was limited to answering some of the points used at the time (and still) to argue that Ireland can’t bring in a tax that every country has in some form or other.

A land value tax is the best suggestion I’ve seen so far.
Thanks for the comment,

Ronan.

By: Fergal Daly

Fergal Daly — Fri, 18 Sep 2009 12:26:21 +0000

I agree with Ronnie above. If we’re going to have a property this tax (and I’m mostly for it), why would it be on the value of the house and not just the site? Assuming you set rates so that both methods raise the same amount of money, you should use the method with the greatest social benefit.

Taxing house value discourages me from improving my house, insulating, efficient heating, solar panels, nice garden, conservatory etc. It can also lead to the destruction of perfectly good building stock: http://www.propertywire.com/news/features/empty-property-rate-tax-owners-demolish-200811121945.html .

Taxing site value encourages good use of land, higher buildings (still within the planning limits of course) and it makes it expensive to hoard land in prime locations – supposedly a major problem over the last 10 years.

One downside of using site value is that it may encourage smaller gardens, and Amsterdam-style skinny tall houses. On the gardens front, maybe but people already choose to pay more for larger gardens. On the skinny tall buildings, I don’t know if that’s necessarily a bad thing as long as it doesn’t go crazy (I wonder how high the rates were in Amsterdam to really cause this effect.)

By: Dankoozy

Dankoozy — Sun, 09 Aug 2009 07:30:33 +0000

This is ridiculous, all it would do is make sure that only rich people with an income to match could afford to live in high value properties.

1% is a lot of money, think about someone living in a million euro house, i don’t think too many people with those houses could afford to pay an extra 10k a year. especially not if they lose their job, they’d have to move out even if they owned their house outright. even .5% will be enough to have a fair few people be forced to sell the family home

there are an awful lot of people who bought their house when it was cheap, built their own house or whatever and these people are by no means rich but thanks to the property boom of recent years the value has increased and those people will end up paying a tax tailored for the stereotypical owner of a house with that value.

a tax based on ones usage of local council resources would be more fair as one could choose to consume less or live completely off the grid. but to tax someone every year for the privilege of living in their own house is a ridiculous idea, no matter how badly the government needs money