The controversial new €100 Household Charge did not get a lot of attention on here – there was a blogpost on 5th December 2011 when the legislation to give effect to the charge was published and there was a second blogpost at the start of January 2012 which tried to balance the two sides of the argument – essentially we need to close a massive deficit gap between what we collect in taxes and what we pay out to the public sector and welfare and a property tax is a means to help with that, versus the fact that a flat tax which generally ignores ability to pay or value of property is unfair. And since then the blog has stayed out of the debate which has generated huge resentment and rift in this country and any statement is analysed to see which side is being taken – for example do you refer to this new measure as a “charge” or a “tax” – I’m going to do what the BBC do when reporting events in Derry when they intersperse the use of “Londonderry” and “Derry” and I will refer to it as a “charge” and “tax” in the following.
Last night at midnight, the deadline for registering and paying the charge passed. RTE reported at 1am this morning that 805,569 properties were “registered for the €100 charge”. RTE is not reporting this matter accurately, this blogpost examines the facts.
If you read the RTE report today it says that “An estimated 805,569 properties were registered for the €100 charge by the time the deadline passed. 1.6 million households are liable for the tax.” You might conclude that just over half of households had paid the charge. But that’s not true – the RTE itself reports that 621,717 properties “were processed”, and “89,000 postal applications were still to be processed and the agency estimated 82,175 registrations were on hand at local authority offices across the country. Nearly 12,500 properties were registered for a waiver”
Add together 621,717 + 89,000 + 82,175 + 12,500 and you get 805,392 – in other words, the headline figures reported by RTE include “waivers”. What are “waivers”, you might ask and are they the same as “exemptions”
Indeed where is officialdom getting the much-vaunted 1.8m households of which 1.6m are supposedly required to pay the €100 charge, generating a total maximum tax of €160m?
Earlier this week, the CSO continued its series of publications following the Census that was taken in April 2011. It revealed that there are 1,994,845 dwellings in this country, that excludes derelict buildings. So, on the face of it, you might expect a flat €100 house tax to yield €199m, not €160m.
But we know that certain categories of housing is to be exempted – the Department refers to them as “exemptions” and “waivers”.
These are the “waivers” according to the Department’s website
(1) Owners of residential property entitled to mortgage interest supplement
(2) Owners of residential property located in certain prescribed unfinished housing estates (see Unfinished Housing Estates section for more detail)
We know that around 19,000 households are in receipt of mortgage interest supplement. We believe that there are about 34,000 households are in so-called Category 3/4 “ghost estates” but that remains to be confirmed.
These are the “exemptions” according to the Department’s website
(1) Residential properties that are part of the trading stock of a business and have not been sold or been the source of any income since construction,
(2) Residential property vested in a Minister of the Government or the Health Service Executive,
(3) Residential property vested in a housing authority, including property where households are purchasing their homes under the Shared Ownership Scheme and where the local authority still retains an ownership stake,
(4) Voluntary and co-operative housing,
(5) Residential property subject to commercial rates and wholly used as a dwelling,
(6) Residential property owned by certain charities or comprised in a discretionary trust, (7) Residential property where a person has to leave their house due to long-term mental or physical infirmity (e.g. a person that has moved into a nursing home).
We don’t have individual figures for much of the above, but we know that, in October 2011 when the last report was published, the number of vacant properties in recently built estates is 18,638. There may be one-off housing as well that is “part of the trading stock of a business” but I wouldn’t think this was significant.
The housing minister was asked in February 2012 for the total number of dwellings controlled by local authorities – the question is here – she replied by referring the questioner to the www.environ.ie website. Looking through this website, there is a spreadsheet marked “SocialandAffordableHousing.xls” which says “This file contains statistics on the delivery of various Housing Supports ie Affordable Housing Schemes;Local authority and Voluntary and Co-operative Social housing;First-time lettings by local authorities;Rental Accommodation Scheme Scheme;Traveller accommodation:Disabled Persons and Essential Repairs Grants paid.” This file suggests that there are 20,223 such households which seems light against previous Census results. Census 2006 indicated there were 23,547 homes being purchased from local authorities, 105,509 being rented from local authorities and 50,480 being rented from a voluntary body.
We don’t have figures for voluntary/charitable housing, residential property subject to commercial rates (presumably nursing homes), or housing vacated because of long term ill-health. Census 2006 indicated there were 50,480 homes being rented from a voluntary body.
Of those that have actually paid the charge, payment can be the full €100 up-front or it can be registration for the instalment plan which allows payment in four equal €25 instalments on 13th March, 14th May, 13th July and 10th September. How many of those that have registered and paid are in fact paying by instalment? Here’s a vignette for you – the Department of the Environment’s press office has been helpful when asked on here for numbers registered and amounts collected, between January and March this year there were about four requests for information and all were responded to helpfully and quickly. However when asked for a breakdown of the payers between full up-front payers and instalments, and when it was drawn to the Department’s attention that the figures being released for payment collected implied 100% of payers were up-front payers which seemed unlikely, then …. silence, the Department clammed up and didn’t respond to any subsequent messages. However on Friday last the Department for the first time referred to cash received and gave the number of payers and using some algebra and simultaneous equations on here, it is calculated that 135, 467 are paying by instalments.
It does however seem difficult to reconcile the Census 2011 figures with the 1.8m and 1.6m bandied about, and it seems clear that the headline “registration” figure includes households which may not be required to pay any household charge. On the face of it therefore, it seems that 805,000 out of 1,995,000 have registered or 40% of the total and of those that are paying 135,000 are paying by instalments which may mean there are problems in May and other instalment dates if instalment payers decide to, or are unable to, pay. Does that mean the anti household charge protesters have won? Seems so, for now at least.
Now that the deadline has passed, there is no reservation on here in criticising the unfairness of this new tax. Yes there will always be inefficiencies and wastage in this economy and society, and these will not be a reason to refuse to pay a lawful tax or charge, but in the case of property, it is particularly egregious that ALL the main political parties in the Dail – Fine Gael, Labour and Fianna Fail, and I believe Sinn Fein – agree with the recommendations of the 1974 Kenny Report which called for land purchased in this State for public use, eg to build a road, be acquired from the owner at its existing value plus 25% which for agricultural land means 8-12,000 per acre plus 25%. Instead we are paying €100,000-plus per acre it seems, rewarding property speculation, reducing the competitiveness of the country and creating property millionaires at the same time as we are levying €100 on what are some of the most vulnerable. Fine Gael and Labour have ignored the Kenny Report (again) since coming back into office, they should hang their heads in shame at their inaction. This issue was examined in some detail here.
NAMA Wine Lake 