In an effort to avoid another outburst á la Irish Water, the Government has been heeding calls to review how the local property tax is calculated. Currently, it is based on the market value of the house as of 2012, and this level is frozen until 2016. The problem is that property prices in Dublin have soared in the interim (up 42%!), which could lead to sudden massive increases, in some cases, a doubling of the cost.
So, efforts to decouple it from the apparently volatile house price index and move to something more stable have been mooted, and the latest wheeze is the Consumer Price Index, which has been somewhat more stable.
What is most interesting is that the idea of a site value tax has been floated, which could be a far more stable and equitable form of property taxation:
A separate source accepted that the initial plan might have been rushed because of pressure from the troika to introduce a property tax.
“We need a more sustainable property tax model. The best is a site value tax which will neutralise fluctuations and create certainty,” said the source.