MINISTER FOR the Environment John Gormley yesterday received Cabinet approval to proceed as a priority with legislation introducing a tax of €200 on second homes and apartments.
The tax will apply to at least 260,000 dwellings throughout the country, and could possibly apply to almost twice that number.
The new tax will be paid directly to local authorities for their own use, and will be collected on a system similar to motor tax.
The Government is hoping the tax will bring in €52 million a year to local authorities.
A spokesman for the Minister said Mr Gormley hoped that the tax would help local government funding and ease the burden of commercial rates.
“The Minister is conscious of the burden on business from commercial rates, and he believes that this additional revenue stream to the councils will allow them to ease that burden,” said the spokesman.
He added that it was hoped to get the legislation passed in the coming months to enable the tax to be collected this year.
The tax of €200 a year per dwelling, which was originally announced in the budget, will apply to all houses and apartments that do not qualify as a principal private residence.
It will cover investment properties, holiday homes and other houses that do not qualify as a principal private residence.
The Department of the Environment is confident that the tax can be collected.
It estimates that there are about 200,000 investment properties in the country to which the tax will apply.
A list of these properties should be available from the Private Residential Tenancies Board with whom landlords are obliged to register.
There are also about 60,000 holiday homes in the country, according to the most recent census records, and there are another 200,000 or so vacant houses in the country, a significant proportion of which are also likely to qualify for the tax.
The owners will be legally obliged to pay the tax this year, with financial penalties for those who do not pay.
Individuals who are liable for the tax will be able to pay the tax to their local authorities by phone, internet or through council offices just like the annual car tax.
While it may take some time for local authorities to impose the system in a comprehensive fashion, the spokesman expressed confidence that the tax would work, as there were extensive records of property ownership.
Investment properties are already registered and the owners of many holiday homes have benefited from tax breaks so that the authorities have a reasonable record of the properties which will qualify.
With a range of penalties for non-payment being envisaged in the legislation, the Department of the Environment is confident that full compliance can be achieved relatively quickly.
Announcing the introduction of the charge in the budget last October, Brian Lenihan said as the demand for local government services was increasing all the time it was important that local authorities could operate on a sustainable financial basis.
He said that the charge would be levied and collected by local authorities, and would be used to support the provision of local services.
