Fianna Fáil and the Property Tax

Fianna Fáil has been cynically opposing the property tax. This is the same party that explicity agreed to a property tax in the EU/IMF/ECB Memorandum of Understanding in December of 2010.

Now it is telling us that this is the “wrong tax, wrong time”. For Fianna Fail, it would appear that the right time to introduce a property tax is when FF is in Government and the wrong time is when FF is in opposition. So much for the “constructive opposition” promised by Micheál Martin. This is the same type of cynical “opposition for opposition’s sake” tactic that saw Fianna Fáil oppose the Anglo-Irish Agreement, back in the 1980’s.

This is the message on property tax that they are distributing (taken from a Fianna Fail briefing note to their Councillors):

Fianna Fáil’s Key Message: “The government’s proposals for a property tax will hit struggling homeowners at a time when they can least afford it. Now is simply not the time to inflict an unfair Property Tax on a struggling economy, weak housing market and homeowners working to make ends meet. A property tax is a political decision by this government to break their pre-election promises, it is not written in stone by the EU/IMF. Fianna Fáil has put forward a fully-costed budget proposal that does not hammer homeowners with a property tax and meets our budget adjustment requirements.”


Key Points

Fianna Fail says “Now is not the time to land people with such a deeply unfair hefty charge on the family home, particularly in light of the spiralling mortgage arrears crisis.” What they don’t mention, is that under their proposals, they would have retained the Household Charge. They would have retained a flat rate charge, whereby millionaires and the owners of one bedroom or studio apartments would have paid the same charge.

Fianna Fáil claims that it submitted “fair” amendments to the tax, which would have exempted: People in Mortgage arrears, those in negative equity, “squeezed middle income families” (which they do not define) and house buyers who paid “huge stamp duty”. Under these proposals, almost everyone in the country would be exempt from the Local Property Tax.

Fianna Fáil claims that it didn’t sign up for this tax with the troika. They say that they signed up for a site value tax. What they don’t reveal is that this tax is even more punitive and unfair. Under a site value tax, each piece of land is assessed for its maximum value. This would take in potential development potential, and not the actual use of the house or dwelling that is on this land. Under this tax, a two bedroom cottage on a third of an acre of land, and an eight bedroom mansion next door to it, on a third of an acre of land, would be assessed for the exact same amount.

Fianna Fáil claims the property tax is “an option, a choice the Government has made”. The Troika agreement is a commitment, not an option. It is a commitment that Fianna Fail made on behalf of the Irish State.   And now, they are cynically trying to walk away from it, and oppose it for populist reasons.

Fianna Fáil’s alternatives to the property tax included increases to the USC (which they introduced in the first place), a 10% levy on off license sales, sugar and fast food taxes, and reductions in earnings cap for pension contributions. All of these measures would serve to depress spending at a time when the economy is only beginning to recover, and would disproportionately impact on low and middle income earners

A number of criteria are in place for deferrals of the tax for those who are in mortgage distress, whose incomes have been impacted by loss of work, etc., those on fixed incomes, owners of homes affected by pyrite, etc.

The local property tax will be a vital way of ensuring that local authorities have the funding for important services in local areas.

It will also provide a level of certainty for taxpayers, as the levels set for the first year will apply for three years