Clients and others may know that the Local Government (Household Charge) Act 2011, signed into law by President Higgins on 19 December 2011, puts in place a (temporary) €100 annual levy per household effective 1 January 2012. There are some exceptions to the payment of the charge but its structure is similar to the non-principal private residence (NPPR) charge introduced in 2009. The obligation to pay will amount to a charge on the property, so verification will be needed that it has been fully paid before there is any mortgage or sale of properties and the other distinctive feature of the new charge is that it will not be payable by a residential tenant holding a lease for less than 20 years. That said, there is nothing to stop a landlord providing in a letting agreement that its tenant must pay such a charge – except of course the still fragile state of the residential letting market!
The support deal with the Troika in December 2010 committed the Government to introduce a residential property-based site value tax from 2012. The household charge is the (interim) measure to this effect. The Government has flagged that a more narrowly targeted property tax will be introduced from 2013 or 2014, the liability to pay varying on the value of the property (probably within specific bands) with perhaps some factoring in of household income. Many issues will arise in the framing of such legislation which we are sure to hear plenty about when it is published later this year.
Pat Ahern
