DOMINIC COYLE answers readers' queries

State is being unfair to us on a number of fronts

Q

I purchased a property as an investment in 2005 and, like a fool, paid over €20,000 stamp duty at the time. The State is now seeking €300 per annum in charges without giving regard to this payment. I see this as being grossly unfair and unjust. Furthermore, this will be on top of me paying my own residential charges. Do I have any options?

Another thing that would seem unfair is that my wife had to leave the Civil Service in 1971 on marriage. She was out of the workforce rearing a family for more than 20 years, returning in 1994. The State has ignored her homemaker status before 1994 thereby her losing 20-years-plus credits.

At present, with only 20-years-plus working, she comes in with 25/26 annual contributions average (which equates to a payment of €225), slightly below the maximum of 48 contributions (€230) for full contributory pension. With three bands between 20 and 48 proposed in the Budget, her more than 20 years working will be reduced to €196 (nearly €30 less). This must be seen as completely unfair and victimising the position of the homemaker.

– Mr GC, Dublin

A

You seem to have taken quite a hit as a family in the Budget as these two quite distinct queries attests but it might not be as bad as you think. Taking the second issue first, the issue of women forced out of employment by the marriage bar was always going to arise as the obvious inequity in the reform of payment bands for the contributory State pension. However, at this stage, only a remarkably small number of women will be affected.

The marriage bar ended in 1973. While this is of little consolation to you given that your wife was then working as a homemaker, there was nothing in Irish legislation to preclude her working at that stage. As such, it is not quite correct to blame the State for the full 20-year plus absence from the workforce.

Secondly, the new measures only come into force from September of next year, and even then only for new applicants. The vast majority of those women quite unjustly impacted by the marriage bar are very unlikely to be adversely affected by this latest measure.

In more general terms, it does seem fair the Government should make some differentiation between people who have an average of just 20 PRSI “stamps” per year over their working life and those who would have more than twice that number.

On the first issue you raise, you are certainly not alone. The measures introduced in the Budget to kick-start the property market were very carefully targeted.

Most particularly, relief in relation to those people who paid exorbitant amounts in stamp duty during the heady days of the Celtic Tiger bubble was restricted only to those people who were first-time buyers. This is a very narrow interpretation of the pre-election promise of Fine Gael to recognise the pain of bubble era property buyers.

Having said that, measures in the budget were always likely to focus on owner-occupiers rather than property investors – no matter how small scale.

Equally, it is remarkably difficult to argue against some form of property tax in this country and any eventual “full” system will almost certainly cost you more than the current €100 a year.

Your problem, and that of many other people, is that the State abused stamp duty down the years to compensate for its decision – on political grounds – to abdicate responsibility for the introduction of a proper and fair system of property tax.

This column is a reader service and is not intended to replace professional advice. No personal correspondence will be entered into.

Please send your queries to Dominic Coyle, QA, The Irish Times, 24-28 Tara Street, Dublin 2. E-mail: dcoyle@ irishtimes.com