The National Executive Council  of SIPTU has called on the Government to suspend the proposed Household Charge and cut tax reliefs for property owners and landlords instead.

SIPTU is  The Services, Industrial, Professional and Technical Union – and it has around  200,000 members.

SIPTU say the Household Charge is a flat tax which is unfair because it subsidises wealthy people at the expense of middle and low income families.
SIPTU also say they do support the principle of a fair and progressive property tax which is proportionate and which recognises that wealthy households can afford to pay more than those with modest earnings while those on lower incomes should be exempt.

SIPTU propose that the loss of the expected €160 million revenue  from the Household Tax could be recovered by the immediate suspension of all unused section 23 tax reliefs and accelerated capital allowances . (They estimate that could  save  €100m in tax relief  in 2012 .)

SIPTU also suggest the restriction of  landlord mortgage interest relief for both residential and non-residential properties by 10%  – down to 65%.  They say this would bring in an estimated €75 million.

Read more about the Household Charge

Back in September 2011  the government released some brief outlines of the proposed charges on Septic Tanks.  Many people referred to this as the “Septic Tank Tax”.

There have been delays getting the  Water Services (Amendment) Bill 2011 through the Dail – but it was finally passed in February 2012
It is going to mean yet another charge on top of the Household Tax for many rural homeowners.

This  legislation  provides for a registration and inspection system for septic tanks which is required to address a European Court of Justice ruling against Ireland.

It affects all domestic waste treatment systems – basically any property that is not connected to the main sewerage system.

Inspections of septic tanks and other waste ststems are expected to begin in 2013 and will involve checking as many as 400,000 septic tanks and waste treatment plants.  (At least it might create a few jobs)

All householders with septic tanks and other on-site systems will be required to register details of their system with the relevant local authority and a national register will be compiled and held by the EPA;

Householders will be required to pay a  septic tank registration fee :   The fee is going to be €50 – but anyone who registers in the first 3 months will only have to pay €5. See more about Septic Tank Registration Charges

Registration is expected to start in April 2012 and all households will be expected to register their waste treatment plants and septic tanks before April 2013.

Following the initial registration, householders will not be required to re-register their systems for several years – an interval of 5 years is envisaged between each registration; (No clarification is given on payment of re-registration fees)

- The revenue generated from registration fees will be used to fund the delivery of a national inspection plan which will be developed by the EPA and its roll-out will be managed by the local authorities;

Septic Tank Inspections will be concentrated on areas with higher risk to the environment and public health, they will also be carried out in lower risk areas but at a lower rate;

- Inspections may give rise to householders being advised to improve the maintenance of their systems or, in more serious situations, may require the upgrading or remediation of the treatment system.
The minister for the Environment staed in the Dail that he would ” do everything possible to ensure people do not experience financial hardship”.

If a householder is advised that their septic tank requires upgrading – they may appeal and apply for a re-inspection . This appeal will incur a fee – (not exceeding €200)

Note – Anyone who wants to apply to become a registered inspector of septic tanks  will also have to pay an application fee. (Not exceeding €1000 )

Householders are to be offered a reduced septic tank registration  fee of €5 if they register within the first three months of the new scheme.

This “early bird” incentive has been announced by Phil Hogan today. He said the normal fee of €50 will apply to registrations made after the first 3 months .  It is hoped this incentive scheme will ensure a speedy take up of the voluntary registration of septic tanks.

Septic tank Registration will begin in April 2012 -  and all tanks and waste treatment plants registered before June 30th 2012 will be charged a reduced fee of €5.

More details of Septic Tank Registration and Charges Here

Details of possible Fines for Non Registration here

Full details of how and where to register will be given here as soon as it is announced.

The tax on Non Principal Private Residences ( NPPR ) in Ireland  came into effect in Ireland on 31st July 2009.
The 2012 NPPR charge is €200 – it has been the the same amount since 2009

The 2012 NPPR charge is based upon the ownership and status of the property on the 31st March 2012.  So -  if you own a property in Ireland on 31st March 2012 and it is not your main residence you will be liable for the NPPR charge.( Non principal private residences).
You will also be liable for the new Household Charge from January 1st 2012.
Property owners need to pay the NPPR charge for 2012 on or before the 30th June 2012  to avoid late payment fees.

Although it is sometimes  referred to as a “second home ” tax – it does not matter if you only own the one property . If  you are not  using the house as your main residence – then you are liable for the NPPR .

The 2012 NPPR charge must be paid within two months of the liability date- i.e before 31st May 2012.
A late payment fee of €20 a month is payable after a further month has expired i.e three months after the liability date and one month after the last date for payment. There is a one month grace period – so all charges paid after 30th June 2012 will attract a late payment fee of €20 a month.

The  “NPPR” charge is aimed at  property that anyone owns in Ireland that is not used by them as their principal residence. You do not have to own two homes to be liable for this charge. You could be living in a rented house or living abroad while the home you own is empty or you have tenants in it.
The  NPPR charge is the same for all properties – regardless of size, location or value.

The legislation for NPPR  (Local Government (Charges) Act 2009 ) is structured with a starting position of a universal liability for all residential dwellings in respect of the charge. It then goes on to exempt certain buildings and owners from this liability.

The main exemption is for principal private residences. No person can have more than one sole or main residence. If you are renting a home and own another property – you are still liable for the NPPR. You don’t have to own more than one house to be liable.

Note : A property that is not suitable for use as a dwelling should not be regarded as dwelling within the meaning of the act . ( A temporary cutting off of the electricity or water supply does not make a property unsuitable)

Other Exemptions: according to nppr.ie

a) Where a person partly occupies a dwelling as his or her sole or main residence, and avails of and is entitled to the Revenue Commissioner’s Rent-a- Room Scheme, no liability for the NPPR charge will apply.

b) Charities are exempt
c)Properies that are liable for commercial rates will not be laible for the NPPR.
d)There is also an exemption for Newly Constructed but Unsold Buildings – that are vacant and  have never been occupied.

Property Owners can register your properties and pay the charges online at the nppr.ie  website by credit or debit card.
Property owners  will also be able to register and pay at your local council offices using an  NPPR registration form. The payment types accepted wil be credit card, debit card, bank draft, postal order and cheque. Over the counter payments will incur a €10 fee from Jan 2012

Late Payment Fees : if the NPPR  charge is not paid within a month after the last date for payment, a late payment fee of €20 will apply for every month or part of month that the €200 Euro charge remains unpaid.

Landlords Note: Information from Revenue Dept  is that the €200 charge is not an allowable expense for calculating rental income.

Property Registration:
It seems that the onus is on property owners to register any properties that are not their principal residence.  There is no national housing / address database in Ireland – so it is probably going to be difficult for the local authorities to determine which properties are actually non principal private residences.
The Local Government Charges Bill 2009 allows for the use of information from the Private Residential Tenancies Board , the Revenue department  and ESB to assist in the identification of non principal residences. There are probably many landlords who are not even registered with the PRTB – so there may be many rented properties that will be missed unless the owner voluntarily registers them.

Properties in the Rental Accommodation Scheme were  exempt – but that exemption has been withdrawn from Jan 2012

There are also limited exemptions where a person is moving house and, in temporarily  owns two houses for a  short period.

Full details on www.NPPR.ie where you can register and make payments.

(Update -  A  Household Charge – a new property tax was introduced in January 2012   All owners of residential property are liable fo this  -  even those who already pay NPPR )

December 6th 2011  – Day Two of Budget 2012 – Taxation

These are the main points of the second day of Budget 2012

This article will be updated as the details are announced.

Income Tax – No Increases , No Changes to Tax Bands or Tax Credits

Universal Social Charge -  From January 1st the exemption level on the charge will rise from €4,004 to €10,036. No USC to be charged on people with total incomes below 10036.
Details of USC changes here

Carbon Tax – Increased tonight to €20 per tonne on Petrol and Diesel.  (Increase of 1.5c per litre from midnight tonight ) No increase on heating oil until May 2012. No extra carbon tax on solid fuel.

Car Tax Increases - more details  – upto 54% Increases !

Mortgage Interest Relief  -  An increased rate of mortgage interest relief to 30% for First Time Buyers who took out mortgage between 2004 and 2008.
Extend 25% Mortgage Interest Relief to first-time buyers for a final 12 months up until end of 2012. (It was due to be cut in Jan 2012)

VAT Increase  from 21% to 23% and guarantee no further hikes in this rate during the lifetime of this government.

Household Charge confirmed at €100 in 2012 – more details of Household Charge here

Duty on Cigarettes – adding 25c per pack of 20 from tonight. No increases on Alcohol.

CAPITAL ACQUISITIONS TAX Increasing from 25% to 30%

CAPITAL GAINS TAX Increasing  from 25% to 30% after today

DIRT Increasing  from 27% to 30%

CAPITAL GAINS  TAX  – Property purchased from midnight tonight and end of 2013 -held for at least 7 years – is exempt from Capital Gains

STAMP DUTY for commercial property transfers to be reduced from current rate of 6% to a flat rate of 2% from midnight tonight. This  lower rate applies to all non-residential property, including farmland as well as commercial and industrial buildings

PRSI :  Remove the remaining 50% employer PRSI relief on employee pensions
Further Broaden base of PRSI to cover rental, investment and other forms of income from 2013

Mortgage interest Relief for first-time buyers is  being  drastically reduced from 2012. It will be abolished from January 2013 for First Time Buyers

This is not to be confused with Mortgage Interest Supplement – which is a payment to help low income households with mortgage payments.

Mortgage interest relief – also known as  as Tax Relief at Source (TRS), is worth as much as €416 a month to first-time buyers .  TRS  is available on interest payments of up to  €20,000 a year . The current  rates of TRS relief   (2011) for first-time buyers are  25% for the first and second  year ,  22.5% in years 3, 4 and 5. and  20% for tax years 6 and 7.
After 7 years -  you are no longer classed as a first time buyer – and get the lower rate of 15%

From Jan 2012 – the maximum annual amounts of interest that will qualify for relief will be €6,000 for married or widowed people and €3,000 for single people. These ceilings will be the same for first-time buyers and non-first-time buyers
The rates of TRs are alos being reduced in Jan 2012 – the new ates will be  15% for first-time buyers and 10% for non-first-time buyers.

It means that a first-time buyer who purchases a home up to and including the 31 December 2011 will be in line to qualify for up to  €31,500 over a seven-year period.

However, a first-time buyer who completes their mortgage on January 1, 2012 will receive a maximum benefit of  €6,300.

Maybe now is a good time to buy a house?

Below is a summary of TRS dates and entitlements…

If you took out a mortgage in 2003 or earlier, your entitlement to TRS expired in 2009.

If you took out a mortgage   between 1 January 2004 and 31 December 2011,your entitlement to relief will continue until the end of 2017. (After the first 7 years you will be no longer classed as a first time buyer)

If you take out a mortgage between 1 January 2012 and 31 December 2012  you will get the lower rates of relief and lower ceilings on the amounts of qualifying interest.

Mortgages taken out after 31 December 2012 will get no TRS at all.

There was also a proposal  to increase the rate of mortgage interest relief to 30% for first-time buyers who took out mortgages in the period 2004-2008. This has yet to be confirmed – and may be  in Budget 2012

A new “household charge” is planned to be introduced in Ireland from January 2012 – it was announced by Environment Minister Phil Hogan yesterday.
This Household Charge is an interim measure  until a fully working  Property Tax  system is put in place. The property tax can’t be fully implemented until the government have  put in place a  property valuation system .

See here for More Details of the new Household Charge in Ireland

The amount of this household charge will be the same for every property – but the actual amount is not yet known. There will be exemptions or reductions it seems – for those on very low incomes or on social welfare. It is not yet clear if the charge will apply only to home owners or if tenants will also be expected to pay it. Clarification on how second homes will be treated is also required – these non principal residences are already liable for the NPPR.

A property tax or Council Tax has been in operation in England for many  years.
In England the average annual Council Tax  in 2008 was £1,146.  The total Council Tax collected  in 2006/2007  in England amounted to £22.4 billion.
The cost of administering the council  tax was just over £600 million.

Ireland still doesn’t have a national property database or even a postcode system to help identify houses – so it is difficult to see how a property tax system could be fully  implemented  here without long delays and probably significant expense.

The Fine Gael – Labour program for government did mention both a property charge and a water charge being fast tracked.

Before the election – Fine Gael said they would  hand over the choice on property taxes to the local authorities. Local authorities could opt not to increase local taxes, increase local charges for waste and services or introduce a ‘‘site sale profits tax”.

The idea of a property tax was mentioned in the IMF/ECB agreed Four Year Plan -  where  Fianna Fail comitted to A ” site value tax” to be introduced  in 2012 – with a minimum charge of €100 per property.

The idea of a tax on septic tanks in Ireland has been mentioned in recent weeks  – but the term “tax” is a bit misleading.
The so called Septic Tank  Tax is being mentioned because  a  European Court of Justice ruling found that Ireland has failed to make adequate legislation for dealing with domestic waste-water from septic tanks and other similar  wastewater treatment systems.
Ireland was required to adopt the necessary legislation, which ought to have been in place by April 1993.
This month Ireland is being sent back to the EU Court of Justice and the EU commission is asking the Court to impose a lump-sum fine of €2.7 million and a daily penalty payment of € 26,173

There are over 400,00 of these kind of waste treatment systems in Ireland – and they need to  be  maintained andregularly de-sludged  to keep them working properly,

In many cases homeowners never do anything about septic tanks or other  sewage treatment systems – and they could be  causing serious pollution.

There needs to be some sort of  licensing and inspection system  – and this will involve a cost  – probably to homeowners.
Most responsible owners of septic tanks will already have them checked and emptied at regular intervals – and that will already be costing them money.

It is expected that a mandatory inspection  system will be needed – which could  mean annual charges in the region of €80 or more for rural homeowners.