Minister for the Environment, Community and Local Government, Phil Hogan, has this morning published the Local Government (Household Charge) Bill 2011 which gives legal effect to the new household charge/property charge that will come into effect from January 2012.
It will apply to most homes in the State though there are exceptions such as mobile homes, houseboats, and, in the context of this blog, housing that has not yet been used as a dwelling; so NAMA’s new apartments and houses will remain exempt for the time being, unless they’re being rented of course.
The annual charge is €100 but it seems you will be able to pay it in four instalments but the Bill doesn’t give full details of the instalment plan. You can expect the €100 flat charge to increase after 2012. The betting is that the charge will ultimately end up at close to 0.5% of the value of a property each year, in other words if your property is worth €300,000, the annual charge will be €1,500 but to stress, the Bill introduced this morning is for “just” €100 and future changes to the charge is conjecture at this stage.
It is the owner who is liable to pay the charge, not a tenant for example. There are exemptions to those forced to pay the charge: certain trusts, property located in uncompleted estates, homes of the old or infirm where the usual occupant has been removed elsewhere eg a nursing home and where the owner is in receipt of mortgage interest supplement. There will be a one-year exemption on properties where the owner has died.
Local authorities will be able to demand information relating to the property to enable the Department of the Environment, Community and Local Government to compile a database which it seems will eventually be used to impose the successor to the €100 flat charge.
There’s a late payment fee of up to €10 for payments being up to six months late and €20 for 6-12 months late and up to €30 for 12+ months late payment. You’ll also need pay interest at 1% per month on late payments. Unpaid charges can be registered as a charge on the property and sellers will need evidence they are up to date with their payments.
So what happens next? You can expect a letter from your local authority which is responsible for administering and collecting the charges, and sometime in early 2012 you can expect to have to part with €100 or opt for the instalment plan which will probably mean €25 being paid each quarter. You can then expect a further letter requesting information about your property. If you don’t pay, the immediate penalties don’t look harsh, and I can see there being widespread non-payment in the first year, but remember the charge is attached to the property so they know where to find you, or at least find one of your valuable assets.