THE GOVERMENT HAS UNVEILED its plan to introduce a new Site Value Tax from 2012, saying this will generate funding for “essential locally-delivered services”.

The government’s four year plan projects that this tax, which appears to be a property tax by another name, will yield €530m by the end of 2014, beginning with a €180m intake in 2012.

The Site Value Tax will be introduced on a “phased basis” as follows:

• An interim Site Value Tax will be introduced in 2012, applicable to all land other than agricultural land and land subject to commercial rates
• The interim period includes a fixed local service contribution of €100 per annum (€2 per week) which will raise €180m
• The final Site Value Tax will be introduced in 2013 when valuations have been completed
• That tax is estimated to apply to 1.8m households and zoned lands that would equate to an estimated further 700,000 houses
• For full implementation of the tax, commercial rates will be moved to a site value basis also
• This income will mean a lower contribution from the Exchequer and motor tax revenues to local authorities

In terms of commercial property, the plan also outlines proposals to review commercial rents, saying the OPW “will lead a coordinated effort to reduce office rents by up to 15%”.

It also says proposals for legislation to “overhaul and streamline the property revaluation process” will be brought to government.

The document says that governments seeking to raise tax revenues, but which are not willing to raise corporate tax rates, must “consider increasing all other types of tax” including property tax.

Four year plan includes tax hikes, VAT increase and huge spending cuts >