Ciaran Cuffe: tax views go against his own party

A BLOG by Green Party minister Ciaran Cuffe advocating the introduction of a property tax in direct contravention of party policy and the programme for government was removed from the web this weekend.

The planning minister proposed that instead of raising income tax, the government should abolish stamp duty and introduce a property levy. It would mean that houses under 100 square metres (1,076sq ft) could be charged €200, with those over 200sq m (2,153sq ft) paying €600 and a middle rate of €400.

"I'd say such a charge could raise the guts of several hundred million, and would be more equitable than a rise in income tax. The beauty of such a scheme is that it could be implemented quickly without a cumbersome state-led assessment of each property. Another advantage would be that it would allow people to move home when they wish without an excessive tax burden," he said in his entry to his 'Cuffe Street' blog.

However, Cuffe has since removed these views, "following consultation with colleagues". Green Party sources stressed there were no recriminations whatsoever and that Cuffe had himself taken the decision to take down the comments.

Despite the withdrawal of the comments, the call for a self-assessed property levy from the planning minister is certain to strengthen the case for its introduction in the budget.

While it has been reported that a property tax is off the agenda for this year, there is a view within government and the civil service that some form of levy will have to be considered because of the huge difficulty in securing €3bn in savings.

Cuffe's comments will give further impetus to that view, particularly as the Greens had been regarded as the strongest opponents of a property levy, unless it involved their favoured site valuation tax.

A spokesman for the Green Party told the Sunday Tribune that Cuffe's views were personal and not party policy. The introduction of a site valuation tax – rather than a property tax based on the size or value of the actual house – was in the programme for government, he said.

However, it is privately accepted in government that the introduction of a site valuation tax is years off because of the difficulty in valuing every site in the state. In contrast, a self-assessed system based on the size of a house could be introduced immediately.

The advisory group of civil servants that outline tax options to the finance minister considered the possibility of a property tax before last year's budget.

The 'Tax Strategy Group' suggested an annual property tax ranging from €188 on houses worth less than €150,000 to €3,750 on homes worth over €1m. This would have raised between €1.2bn and €1.5bn, tax documents released by the department of finance reveal.

Under this proposal – using a recommended rate of 0.30% and incorporating a seven-year holiday for those who had paid stamp duty – the owner of an average three-bedroom house in Dublin worth €242,000 today would pay an annual property tax of €725. Outside Dublin, the owner of an average house would pay around €550.