This article contains background information on the new Property Tax and answers some Frequently Asked Questions.

I support the re-instatement of the Property Tax, it is long-overdue and property owners have enjoyed a seven-year holiday since it was last collected in 2009. I have two substantial criticisms which are set out in the sidebar, but overall this is an important and positive move by the government.

There are strong objections and many questions on this new tax with two main sources – people who are genuinely unsure of how the new arrangements will work and political objectors from the Opposition.

These are the national totals of Property Tax paid in the period 1993-2009, compiled from –

• House Rates, which is paid in Municipal Corporations, from the Estimates of Revenue and Expenditure for the Statutory Boards, Similar Authorities and the THA.
• Land & Building Taxes, which is paid in the rest of the country, from the Estimates of Revenue.

The objections from the Opposition elements are bemusing, to say the least, given the pattern of tax collections set out in the graph and table. Plainly, when the UNC was in power in the period 1995-2001, there was a dramatic and unexplained decline in the collections of property tax. That decline was reversed when the UNC left office.

An explanation as to the dates – Up to the start of 1998, the country’s fiscal year-end for national accounting was 31st December. There was a transition between 1998 and 2001, with periods to be read as follows ‘1998’ is 1st January to 30th September of that year: ‘1998/1999’ is 12 months ending 30th September 1999 and 1999/2000 being 12 months ending 30th September 2000.

FAQs

I built this property with my own money and effort, so why should I have to pay taxes on it?

This common argument is simply untenable, since if that principle were widely applied there would be no case for any type of Corporation or Personal taxation.

We already pay Stamp Duty when we buy our properties, so why should we have to pay more than one tax? Isn’t that ‘Double-Taxation’?

Again, returning to the comparison with companies, tax is due in different modes such as VAT on sales, Green Fund, Business Levy and Corporation Tax on profits. What is it about property which creates the justification for a single mode of taxation?

Do I have to complete the Valuation Return Form or let Field Assessors into my property?

There are penalties for non-compliance with those requirements and of course there is the prospect that there will be the usual bane of non-enforcement, but there are perils to that course of action. If a property owner did not comply and then appealed the assessment, it would be an uphill battle to persuade a tribunal that the State had acted unfairly when one had not provided the accurate information as required.

What about properties which are not actually rented? Why is Property Tax due on those?

This is a tax on the rental value of the property, levied on its owner, who can either benefit from the rental itself or the pride of ownership arising from having no rent to pay.

How can an estimate be done of rental value if no property is rented in the area?

That is a matter of professional judgment based on the available records and rental advice forms part of every mortgage valuation in every part of the country at present.

The innate effectiveness of this tax is that property is an immovable asset, so those persons and companies which are now evading other taxes will be unable to escape this new tax on the various properties in their ownership.