Frank Daly: commission leader

A property tax starting at approximately €600 per annum and involving home owners performing their own valuations has been agreed by the Commission on Taxation which holds its final meeting this week. Their report is expected to go to the Department of Finance at the end of the month.

Following discussions with the Valuation Office the commission has abandoned the idea of getting a government agency or local authority to value properties. Instead it has decided to recommend a set of bands with homeowners forced to chose one which corresponds to a flat charge.

A source said: "Self valuation is the best, or least worst, approach though obviously still messy in terms of people figuring out what their house is worth. The best way to work around this is by using bands as opposed to precise values."

It is understood the lowest charge will be about €600 to €750, with bands for more expensive houses stretching well into the thousands. Once a house is worth over €1.5m, the tax is administered as a proportion of the house value.

The commission, led by former head of the Revenue, Frank Daly, hopes the idea of householders filling in a relatively simple form will make the proposal more palatable to the Department, which is trying to avoid a major bureaucratic exercise. Income will also be taken into account when deciding which part of the band the homeowner fits into, however the commission is understood to be adverse to making too many exemptions.

It is understood the commission favours local authorities having control over the charge collection, but some members favour the Revenue Commissioners having a role.

While the government has signalled its intent not to increase income taxation any further, other revenue raising ideas are on the cards, among them taxing property. Members of the commission believe there is a strong chance property tax won't come in 2010, but will be phased in at a later date.