The Government ruled out exemptions to the property tax for people in financial hardship on the basis it would risk creating a “flood of applicants” and make administration of the tax extremely difficult.
Internal records show earlier this year the Department of Finance and Revenue Commissioners considered at length introducing such a measure by way of an amendment to legislation.
But senior officials warned an “organised campaign of ‘hardship applications’ would seriously affect the yield as it would be difficult to justify collecting the tax until applications were processed”.
Deferred payments
In the end, the Government opted to introduce an option to defer payment for those on low incomes, subject to means-testing. However, interest is payable on these unpaid sums.
Records also show that officials at Minister for Finance Michael Noonan’s department and the Revenue opted against specific exemptions for vulnerable groups – such as hepatitis C sufferers – due to concerns it would undermine the total yield of the tax.
Latest figures show more than 1.5 million homes have filed property tax returns in advance of last week’s deadline, a compliance rate of about 80 per cent.
A recent survey by the Irish League of Credit Unions indicates that as many as eight in 10 people are sacrificing expenditure such as food or health insurance to pay bills such as the property tax.
In legislation enacted earlier this year, the Department of Finance introduced a number of exemptions to the property tax for a small number of categories such as people with disabilities or those living on unfinished housing estates.
But internal documents show officials moved to narrow significantly many of these exemptions due to concerns over the number of people who might be eligible for them.
Internal records show officials avoided making an explicit exemption for “homeless” people, on the basis that it could apply to more than 100,000 families on local authority waiting lists.
This was despite lobbying by Minister of State for Housing Jan O’Sullivan, who insisted the Government needed such a measure to show its determination to support those in need.
Instead, the final legislation introduced a much narrower exemption for those in need of “accommodation and support” to live in the community. This narrowed eligibility for the exemption to only those people living in specialised forms of sheltered housing.
However, it meant that around half of accommodation provided by social housing bodies to formerly homeless people are now liable to the property tax.
Explicit exemptions
Similarly, the Government was lobbied over introducing explicit exemptions for people who received infected blood products such as hepatitis C as a result of State negligence.
Again, officials confined the exemption to people who were “permanently and totally incapacitated” and had to make extensive adaptions to their homes.
In response to one letter from a woman with hepatitis C, a Revenue official noted that a person suffering from the disease would ultimately become totally incapacitated.
But the official added: “I don’t think we should extend that interpretation to this situation . . . the [tax] exemption is for somebody who had had to spend a significant part of their compensation payment on adapting a house specifically because of their disability . . . I don’t get the impression from this woman’s letter that her apartment would have required extensive adaptions.”
