New 'super property tax' plan for wealthy - The Independent.



More kite flying, but it appears that the government are lurching towards a hybrid property tax that ignores the site valuation.



They don't seem to get it. The advantage of the site valuation tax is that it stops the hoarding of land and sites. It stops the deliberate dereliction of valuable urban sites. There are so many advantages to a Site Value Tax that it would be very strange for a government not to put it in place.

So why not?

'Cos Paddy is thick.

You're missing the key element Coles; at least from the 'Political' perspective.

It looks like it's hitting the mythical 'High Earners', so Joe Public has to pay less. Politics 99.999999% appearance.

What would happen if this were done by self-assessment and people were underestimating the market value of a house, whether deliberately or in error? Could Revenue do an audit and pursue them after 10 years for back taxes on the property, with interest and penalties?

Would one have to hire an estate agent to value the house?

And we all know how accurate their valuations have proven to be in the last few years!!! In Galway, only a few estate agents are properly able to value a house. Most either won't or aren't able.

Also, if estate agents are to do the house valuations, is it reasonable to expect that this - I hate to call them profession - group of people, who are deservedly reknown for their lack of ethics, might be open to backhanders to give a lower property valuation for tax purposes?

Millionaires will pay proportionately more? Dubs will pay porportionately more is The real point of this. The site value tax would have led to a more even outcome between urban and rural Ireland. A straight tax on value will mean that an urbsn dweller in a modest semi will pay more than someone living in a McMansion on three acres in a rural area.

I don't know what they will do but I believe, as with means testing children's allowance on a case by case basis, the cost of implementing something like this would be crazy. Therefore wouldn't work. Also very unfair on people who paid massive stamp duty.

I can see apartments making a fAirly hasty recovery with all this talk!

That doesn't make sense. If you are assuming that an urban dweller in a modest semi-d does end up paying more than someone living in a McMansion in a rural area, then you are assuming that the combined value of the urban dweller's house and site is greater than the combined value of the McMansion owner's house and site. Given that the build cost of the McMansion is higher than that of the modest semi-d, it follows that the urban dweller's site must be much more valuable than that of the rural dweller in order to make the combined value higher. So, in your example, the urban dweller is actually the one who is better off, relative to his rural counterpart, under a straight value tax rather than a site value tax.

For example; if a McMansion cost €200k to build on a €100k site but an urban semi-d cost €150k to build on a €200k site then, under a site value tax the urban dweller is paying x% of €200k while the rural dweller is paying x% of €100k. Under a property value tax the urban dweller is paying y% of €350k while the rural dweller is paying y% of €300k. Under a site value tax the urban dweller pays twice as much as a his rural counterpart but under the straight value tax he only pays 17% more.

How so? During the Bubble buyers set their budget according to the total amount they could borrow, including Stamp Duty. In effect, stamp duty wasn't a tax on the buyer, it was actually a tax on the vendor. Should these vendors be compensated for their loss? Of course not.

Similar thought process would make motor tax unfair. The buyer has already paid a huge amount of VAT & VRT

Needless to say there'll be protests over a property tax but introduce higher tax on lower emissions/post 08 cars and there won't be a whimper ala the VAT increase

Will values will be set centrally
eg one bed apartment in Dublin 1 - 100 euro
5 bed detached house in Dublin 4 - 1000 euro

Might take a bed out of the spare room and call it a "study"

and a right of appeal (for a fee) to an independent assesor

Build cost and site purchase cost matter not a jot with market-value tax. Repeat it ten times.

A market-value property tax is not anti-cyclical, any more than stamp duty is. Repeat that one ten times too...

Agree totally that site purchase cost is completely irrelevant. That is why I referred to site value and not site purchase cost. Build cost is relevant to the extent that subtracting current rebuild cost from total current value is a rough and ready way of determining current site value.

It has relevance for site value, not for market value.

Take my house. Site: about 50k, build cost including all bits of about 450k. Market value now, under 300k, I reckon. The rebuild cost hasn't halved.

Ronan Lyons' analysis of site value tax vs a property tax based on value demonstrates clearly that the latter discriminates against urban dwellers. Check it out, it is available on the following link:

http://www.ronanlyons.com/2012/02/10/wo ... ax-debate/

Acknowledged, there will be specific situations like that, but in general I don't think the equation will give rise to a minus site value on a widespread basis nationally. But, even if it does, I cannot envisage any scenario whereby the argument made by mocame above would hold true. If, as (s)he proposed, an urban property with a small house has a higher market value than a rural property with a large house then however you try to separate the value of the house from the value of the land a small house is going to be worth less than a large house and the difference in values of sites alone will be in even more pronounced than the difference in overall property values. So the owner of a small urban house that is worth more than a larger rural house does better out of tax based on property value rather than site value and not worse as mocame had argued.

Ohhh, a study, you must be rich...extra taxes for you