Department of Environment release
Bill to provide for €100 Household Charge to fund vital local services in our communities is published
05/12/11
The Minister for the Environment, Community and Local Government, Mr. Phil Hogan, T.D. today (5 December, 2011) announced the publication of the Bill to provide for the introduction of the household charge of €100 to fund vital local services in line with the requirement in the EU/IMF Programme of Financial Support for Ireland. The Government had announced, in July, 2011, its intention to introduce the household charge in 2012.
The Minister stressed the Government’s firm commitment to introduce a valuation based property tax to replace the household charge. The Minister indicated that work is to commence early in the new year on the development of the property tax.
“A full property tax, requiring a property valuation system, will take time to implement, so the Government is introducing the interim household charge to apply to the majority of owners of residential property in the State. I will establish an inter-Departmental expert group to advise me, by mid 2012, on the design, scope and implementation of the property tax,” the Minister stated.
The Bill will provide for the raising of some €160 million from the household charge which will be used to support the continued delivery by local authorities of vital services for our communities. “It is essential, if we want to continue to have the level of local services we expect, such as fire and emergency services, well maintained streets, public parks, waste services, libraries, open spaces and leisure facilities, that we provide the necessary financial resources to pay for them. I understand that the introduction of the household charge, even though modest at less than the equivalent of €2 a week, represents an additional cost for homeowners so I have provided in the Bill that it may be paid in a number of instalments. I have also introduced provisions in the Bill to protect vulnerable groups in society by providing a waiver for those on mortgage interest supplement and those residing in certain unfinished housing estates.” The Minister indicated that further details on the unfinished estates that will qualify for the waiver will be announced as soon as possible.
In conclusion, the Minister stated “This measure is a further demonstration of this Government’s commitment to restoring balance in the public finances. It will provide a new stream of funding for local government enabling the sector to continue to respond to local needs and contribute to a more efficient, accountable and effective local government system. This is local democracy in action.”
Ends.
The EU/IMF Programme of Finacial Support for Ireland commits the Government to the introduction of a property tax for 2012.
The introduction of the household charge is an interim measure and proposals for a full property tax will be considered by the Government in due course.
The household charge will be €100 in 2012 (equivalent to less than €2 a week).
This charge is another step in reforming the way local authorities are funded; it follows the introduction of the charge on non-principal private residences (NPPR) in 2009.
It will contribute to the funding of local services such as fire and emergency services, libraries, street cleaning, lighting, planting etc.
It is expected to raise some €160 million – based on the number of properties expected to be liable to the charge. The amount raised will be dependent on actual collection rates and the costs incurred in collecting the charge.
Owners not occupiers will be liable.
Monies raised will be paid into the Local Government Fund and will be allocated back to local authorities by the Minister in General Purpose Grants.
The liability date will be 1 January in 2012 and subsequent years and households not availing of instalment arrangements will have three months to pay. Late payment penalties and late payment interest of 1% per month or part thereof will apply thereafter.
Late payment fees, calculated as follows, will apply in the case of a household charge paid
not later than 6 months after the due date, 10 per cent of the amount outstanding,
later than 6 months and not later than 12 months after the due date, 20 per cent of the amount outstanding, or
later than 12 months after the due date, 30 per cent of the amount outstanding.
Collection Arrangements:
Collection by LGMA (Local Government Management Agency) by post or website (once off or instalment by direct debit four times a year).
Main overriding principles
Self declaration basis
Administration costs to be kept to a minimum
Late payment penalties
Exemptions:
Residential Properties that are part of the trading stock of a business (not sold or not having generated an income)
Social housing, including voluntary and cooperative housing units
Residential properties owned by Government/Health Service Executive
Residential properties owned by a charity
Residential properties to which commercial rates apply
Where a person is forced to leave their dwelling due to long-term mental or physical infirmity (elderly person that has moved into a nursing home)
Waivers:
Those in receipt of mortgage interest supplement on the liability date.
Those in certain unfinished housing estates to be prescribed in 2012 and 2013 by the Minister.