Sir, – Jim O'Leary's suggestion that increasing the share of property tax in revenue from income tax to 4 per cent of the total to "fund a programme of transformational reform of income-related taxes" ignores the incidence of these taxes, that is, who pays them ("The local property tax is being slowly choked to death", Opinion & Analysis, October 3rd). Moving some of the tax burden from income tax to property tax would disproportionately hit those homeowners on low or fixed incomes such as pensioners, who would experience little or no relief from lower income tax.
The Irish property tax system is in any case fundamentally flawed in its focus on market value. A Dublin homeowner who has to borrow a large sum to finance a mortgage and has little (or negative) equity has to pay large taxes while a rural dweller borrowing far less, with higher equity, faces lower taxation. This inequality is increased by disregarding all amenity land over one acre in assessing property valuation, not only artificially reducing tax liability, but making it impossible to accurately reassess the correct valuation on sale as an entirely different property has been sold – one on a large holding.
An efficient and fair property tax is very easy to implement – remove the exemption from capital gains tax from the sale of the principal private residence. – Yours, etc,
DONAL McGRATH,
Greystones,
Co Wicklow.