Last night Councillors on Fingal voted for a 15% to property taxes for 2015. I supported this cut. I had pledged before the election to cut property tax by 15% so I was determined to fulfil this pledge. It’s also worth reiterating that Fingal’s income from property tax will be approx. 14% of the overall income for 2015 so it is only a proportion of the overall income.
I have real concerns with this source of taxation. Despite government’s rhetoric that we should never again become over reliant on construction and property we have situation where a significant proportion of local authority income is linked to the health of the property market. Perversely as the ‘value’ of a house goes up the household must pay more. On the other hand if it goes down then the local authority must survive with a reduced income stream.
While Government has stated that this is a tax for local services in Fingal’s case the Department of the Environment, Community and Local Government have now imposed additional liabilities on Fingal County Council. In other words Fingal is being made pay for additional services that other local authorities will have funded by Central government.
As Fingal has learned, where a Council’s property tax take is significant, central government sees it as a means to cut every other grant. Consequently and perversely this penalises financially prudent Councils like Fingal. Property tax has now in fact replaced housing and road grants. Effectively the €22M the Council would have received from government is now cut. What we have is a situation where thousands of homeowners in negative equity are paying a property tax to deal with the housing crisis. Further through its Construction Strategy to 2020 this Government wants to damage local authority income even further by slashing development levies and reducing obligations for social housing. It beggars belief that any Government would consider passing the burden from developers to tax payers.
I was also conscious of the fact that there are a significant number of households that also have to pay management fees in private estates so are getting even less services from local authorities. Households like this need a break.
There was a proposals from some members including the Labour Group to have a 10% cut and to ring-fence this money to tackle homelessness. The proposal was certainly worthy and I would support using additional monies for homeless services. The estimate so far we have is that even with the 15% cut there is an additional €2M in property tax revenue. However apart from the fact that we need to reduce the taxation burden on households in my view if we were to reduce it by just the 10% central Government would cut even more grants from the Council. The fact is homelessness and the housing crisis is a national issue and requires national action.