Briefing Note on the Household Charge

 

        * The Memorandum of Understanding with the EU and IMF commits Ireland to the introduction of a property tax for 2012 and to an increase in the property tax for 2013.

        * 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 (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.

        * Local representatives can prioritise services, making funding more efficient, transparent and relevant to their community.

        * It will fund local services such as fire and emergency services, libraries, street cleaning, lighting, planting etc.

        *Up until now the Exchequer has contributed to the funding of these services but given the current difficult Exchequer position, the funding now needs to be collected locally through the introduction of this charge.  

        * 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.

        * Every effort will be made to keep administrative costs to the minimum.

        * 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 – this will ensure authorities with low population figures will not suffer unduly as a result.

        * The liability date will be January 2012 and households will have three months to pay. Late payment penalties will apply thereafter (€10 a month).

        * If the charge remains unpaid, it will remain attached to the property - if a property is sold the new owner becomes liable for outstanding monies.

        * This charge has nothing to do with water charges. There will be no flat rate water charge and the Minister will announce plans for the water metering programme in autumn.

 

Collection Methods:

 

        * Collected by LGMA (Local Government Management Agency).

        * Based on the principles of the NPPR charge and its successful collection method.

        * Post or website (once off or direct debit four times a year).

        * Four overriding principles:

1.    Self declaration basis;

2.    Administration costs to be kept to a minimum;

3.    Late payment penalties;

4.    If remains unpaid, charge will remain attached to the property - if a property is sold the new owner becomes liable for outstanding monies.

 

Exemptions:

1.      Properties that are part of the trading stock of a business (not sold or not generated an income);

2.      Social housing, including voluntary and cooperative housing units;

3.      Owned by Government/Health Service Executive;

4.      Owned by a Charity;

5.      Properties where commercial rates apply;

6.      Where a person is forced to leave their house due to long-term mental or physical infirmity (elderly person that has moved into a nursing home).

 

Waivers:

1.     Those in receipt of mortgage interest supplement;

2.     Those in certain category 3 and 4 unfinished housing estates (building, planning, control issues and public safety issues or where developer not contactable and there are public safety issues).