Householders will begin to receive property tax assessments next week and those who don’t respond by the end of June will face stiff penalties, the Cabinet has been told.

The chairwoman of the Revenue Commissioners, Josephine Feehily, briefed Ministers yesterday about the operation of the new tax which has caused anxiety among Government backbenchers about the likely public reaction.

Letters will be sent to the country’s 1.6 million householders in the coming weeks giving them six options for paying the local property tax.

Those liable for the tax will be obliged to indicate if they accept the Revenue’s valuation on the property or provide an alternative valuation which will be grouped into €50,000 bands.

People who don’t respond by the end of June will face immediate interest penalties and will ultimately have their tax deducted at source from their salary, pension or social welfare payments, Ms Feehily told Ministers.

She expressed confidence that the Revenue would be able to get a compliance rate of 97 per cent when the system was up and running.

Almost 75 per cent of householders paid the €100 household charge last year and the database assembled during that exercise will provide the basis for the Revenue collection.

Liable to penalties

While householders who do not accept the assessment of their property tax liability in the letter from Revenue will be entitled to submit a lower assessment, they will ultimately be liable to penalties if it is found to be too low.

The Revenue Commissioners will publish an electoral area survey of property values so that people can compare their own assessment with the general level of property valuations in their area.

Ms Feehily told Ministers that the letter from Revenue would make it clear to householders that they must make a return by the end of June indicating how they intend to pay.

The assessment from the Revenue will give householders a number of options for paying the tax. They can opt to have it deducted at source from their salary, pension or welfare payment.

Alternatively they can pay it directly to the tax authorities in one lump sum or in instalments spread over the year.

Self-employed people who do not respond to the assessment will not be entitled to a tax clearance certificate next year.

Interest penalties of 8 per cent will apply to people who do not pay and the Revenue will be entitled to deduct the tax and the penalties at source from salaries, welfare payments or bank accounts.

Grounds for deferral

All those who receive letters are required to make a return to Revenue whether or not they are liable for the tax.

Properties exempt from the tax and householders who apply for a deferral will be also be required to contact the Revenue Commissioners indicating the grounds for deferral or exemption.

A major information campaign about the tax will begin tomorrow with a press conference by the Revenue Commissioners outlining the details of the system.

The introduction of the property tax has caused a great deal of political controversy with a number of Government backbenchers including Fine Gael TD for Dublin South Olivia Mitchell expressing opposition to the valuation system.

There was further controversy in the Dáil about the issue yesterday with the House being adjourned twice in a row about guillotining of debate on the Finance (Local Property Tax) (Amendment) Bill which allows for a number of deferrals, exemptions and penalties for non-compliance with the tax.