It had been a particular bugbear on here that there wasn’t a property price register available in Ireland, until the IMF frogmarched the Government into introducing a limited register in September 2012 which shows residential property transactions from 1st January 2010. Such delays in providing a basic level of transparency seem inexcusable and all government parties from the 1970s onwards have been guilty of paying lipservice to a register but never delivering it when in office. And the absence of such a register has meant the Government was severely constrained when it estimated the €250m of revenues in 2013 that would flow from its new property tax which was based on property value.
But surely, having engaged an expert group to produce an expert report, and as we found out last week, the expert group engaged the ESRI to produce a sub-report and having known for at least 12 months that it would be introducing a property tax in 2013, surely the Government has robust estimates of the value of property in Ireland.
Surely?
It seems that the Government estimate of property values is based on incomplete sources and the Government has committed to the new tax, but that it is more or less clueless what the tax will generate, kinda like buying a scratchcard.
In a response to a parliamentary question from the Sinn Fein finance spokesperson yesterday, the Minister for Finance Michael Noonan conceded “No database exists as yet containing the valuations of the housing stock in the State.” and that estimates were based on the transactions in the property price register and one “unpublished Central Statistics Office (CSO) data based on mortgage transactions and the CSO’s property price index” In other words, who knows, and as Minister Noonan says in his response “However, caution should be applied to this approach given the low number of transactions, the high percentage of non-mortgage transactions (i.e., cash transactions) and the possible bias in recent transactions towards transactions of higher quality housing stock which may not represent the generality of housing valuations in the State”
Here’s the full parliamentary question and response, it is shown as a graphic because the table doesn’t easily copy into text.
Given many people will not pay this tax (unable or unwilling) or will underpay, how will the clawback work? As I understand it, unpaid property tax will be treated as a lien on the property. But how will the property value be determined and how will value fluctuations be treated?
Also how will unpaid property tax rank to mortgage debt in foreclosures? If it ranks higher, then will lenders need to increase their loss provisions. If it ranks lower, will the revenue chase the dispossessed?
@Ahura, very good question about the Revenue’s charge on the property either from unpaid tax or deferrals, will this rank above mortgage debt, I do not know. Anyone?
I live in the quaint, colonial city of Merida, Yucatan, Mexico. With a population of over one million, the local government has had an online (please see below, only in Spanish) property register for years where one can, among many things, pay their taxes online. Currently, we are very occupied getting ready for end of the world. I think Minister Noonan has missed his chance with only nine days left. The Irish are famous for procrastination and it has worked out beautifully.
http://www.merida.gob.mx/municipio/sitiosphp/catastro/php/inicio.php
@Houdini; apparently Vatican astronomers dispute the Mayan calender end of world on Dec 21 2012. No really :) Merida is lovely, fond memories of it many moons ago.
http://www.telegraph.co.uk/news/worldnews/europe/vaticancityandholysee/9739697/Mayan-apocalypse-Vatican-says-the-end-is-not-nigh-for-now.html
Dorothy,
Yes, Merida is still a very lovely respite from the madness of modern society. However, I would not be too confident with Vatican astronomers, Jesuit or not. I do remember a fellow named Galileo who had a run in with the Vatican.
Here’s how it “works” over here,RE Taxes rank first….and yes it is 12/12/12!
Now that the legal issues around repo’s is getting cleaned up,perhaps a secondary market in unpaid RE taxes will develop !
“Between $7 billion and $10 billion in property taxes go delinquent each year, according to Brad Westover, executive director for the National Tax Lien Association. For many state, county and local governments, the failure to collect on these debts weighs heavily on their already-overburdened budgets. In 29 states, plus the District of Columbia, they turn to investors for help.
In these states, investors buy tax lien certificates at auctions, effectively owning a claim against the property until the homeowner pays the county or municipality back or until they default on the debt entirely. In return, the county gets the money it needs to fund schools, pave roads and pay for other infrastructure and services.”
http://www.cnbc.com/id/100303029
wrong link…..phew thankfully not inappropriate,in states most lenders require RE taxes to be paid the them-escrow- and they pay it.
http://money.cnn.com/2012/03/05/real_estate/tax-liens/index.htm