THE OWNERS of more than 300,000 holiday homes will have to pay the new flat-rate household charge in addition to the second-home tax they are already paying, the Minister for the Environment has confirmed.
Phil Hogan said the household charge to be introduced next year will be “completely separate” from the National Principal Primary Residence charge, which is €200 a year.
His spokeswoman confirmed yesterday that the new charge would be levied on every household in the Republic, with no allowance made for the fact that second home owners already pay a charge.
That means from next year owners of second homes will be facing property taxes of at least €300 a year, but probably higher.
The size of the flat-rate household charge has yet to be decided, but it is expected to be higher than the €100 a year proposed by the previous government. In addition, there has been speculation the second-home charge will be substantially increased.
Ironically, owners of holiday homes located outside the State will not have to pay the new charge. But foreign owners of Irish holiday homes – such as the large number of Northerners with properties in Co Donegal – will be liable for the tax.
Mr Hogan’s spokeswoman also confirmed that the new household charge will be levied on each housing unit, so landlords who own multiple apartments could face significant additional bills.
The Government is committed to introducing household and water charges as part of the EU-IMF bailout.
The flat-rate household charge is being imposed from next year as an interim measure until a national property valuation system is worked out to replace it.
Water charging will also be introduced once water meters are provided in all homes, which will take several years. But the Government has said it does not propose to introduce a flat-rate water tax in the interim.
Mr Hogan, answering a Dáil question from Co Donegal Fine Gael TD Joe McHugh, said the property charge would be used to put local services on a sound financial footing.
Mr McHugh said that people’s “relative level of indebtedness” should be taken into account when setting the level of the new charge.
“There are many people who bought properties at the height of the market and who are now facing a big dilemma,” he said.
The method used to collect the new charge is likely to be based on the online system developed for the second-home tax, which has raised much higher amounts than initially anticipated.
It is also likely that penalties will be imposed for late payment of the charge. This is an approach that has proved effective in collecting the second-home tax.
As in the case of the second-home tax, the money raised will go to local authorities.