Second-home tax disputes ‘headed for court’

The new penalties kick in today for people who did not pay arrears of the €200 per year flat-rate tax, which ran from 2009 to 2013, before being replaced by local property tax based on value. A partial amnesty which has frozen the €20 per month penalty since last March ended at midnight and new super penalties, including a 50pc increase, now apply.

But Senator Fidelma Healy-Eames of Galway West again denounced the new penalties as “wholly disproportionate”. She is now convinced the fines scheme will be challenged.

“This is all so grossly unfair that challenges before the courts are inevitable. I firmly believe that the judges may very well take a different view of these arbitrary and excessive penalties,” the Reform Alliance Senator said.

The old tax is still a matter for each local council also backed up the councils’ umbrella body, the Local Government Management Agency (LGMA). A spokeswoman at the weekend said there may be local discretion applied in case of penalties and people in difficulty were advised to contact their council. The new local property tax based on valuation bands is now being administered entirely by the Revenue Commissioners.

Holiday homes

A total of 360,000 properties were registered for the old tax officially known as the’ Non-Principal Private Residence’ charge which was mainly aimed at holiday homes and rental properties.

But just last week the LGMA conceded that they did not know entirely how many housing units were involved even after five years trying to collect the tax. It is understood that “tens of thousands” of charges remain unpaid in spite of an inrush of payments for the past five months and especially through the month of August when €18m was paid in arrears.

The final month of the partial amnesty, which ran from March to August 31, revealed a deal of confusion on what precisely was liable for the tax. One council was claiming that “a granny flat” built on to a house was in fact a second residence and there were other similar disputes.

Senator Healy-Eames said these disputes compounded the prospect of court action.

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