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对房地产税收的支持和反对
房产税是政府对一个人的个人房产的征税问题。个人房产要经过评估来确认一个价值，然后按照这个价值征税。房产税欠款的数量的计算是用财产的公平市场价值乘以当前税率。(Wisegeek -2010)
收取的税收总额通常是基于购买时的房产价值，但是如果房产价值以某种方式提高，例如扩建房产就可能需要重新评估并且增加税收。
我将这个话题划分为几个不同的部分，并分别做了一些研究:
爱尔兰当前的房地产税收论述。
提出了改变爱尔兰的房地产税收。
爱尔兰的房地产税收与国际的比较。
房地产税制的优点和缺点。
现在我要继续讨论上述方面，以及我发现了什么信息。
爱尔兰当前的房地产税收论述。
下面是对当前爱尔兰房地产税收状况的一个简短的总结。
印花税:印花税是政府为调控买房而进行的税收。它是对爱尔兰房地产税收的主要来源。对于首次购房者、所有权拥有者和房地产投资者有不同的印花税税率。首次购买者从所有权拥有者手中购买一所房子时免除支付新印花税和二手房产印花税。(特许会计师协会- 2009 pg 131)
Property Taxation For And Against Economics Essay
Property tax is a levy issued by a government on a person's personal property. The property is assessed to give it a value, and then that value is taxed. The amount of property tax owed is calculated by multiplying the fair market value of the property by the current tax rate”. (Wisegeek -2010)
The amount of tax charged will usually be based on the value of the property when it was purchased however if the property is improved in some way such as building on an extension for example the property may need to be reassessed and the tax increased.
I have divided this topic into a few different areas which I have individually done some research into:
The current tax treatment of property in Ireland at the moment.
Proposed changes to property taxation in Ireland.
Comparisons of property taxation in Ireland and internationally.
The advantages and disadvantages of property taxation.
I am now going to continue on to discuss the above areas and what information I found.
The current tax treatment of property In Ireland
Below is a brief summary of the current tax treatment of property in Ireland at the moment.
Stamp Duty: Stamp Duty is a tax the government charges on buying property. It is the primary source of revenue from property in Ireland. There are different stamp duty rates for first time buyers, owner occupiers and property investors. First time buyers who purchase a house for owner -occupation are exempt from paying stamp duty on both new and second hand properties. (Association of Chartered Accountants – 2009 pg 131)
Capital Gains Tax: This tax is payable on the profits arising from a sale or the disposal of assets including property. It is currently charged at a rate of 25%. There is however an exemption from Capital Gains tax on gains accruing from the disposal of a principal private residence (Property owned and occupied by you or a dependant relative. (Commission on Taxation Report- 2009)
Capital Acquisitions tax: This tax is charged on property received by way gift or inheritance and is charged at a rate of 25%. The gift or inheritance is taxed if its value is over a certain limit or threshold. E.g. the threshold for a son or daughter is currently €434,000. If however you receive a gift or inheritance from your spouse, you are exempt from Capital Acquisitions Tax. (Irish Taxation Law and Practice – 2009/2010 pg 835)
Income tax: Mortgage interest relief is available for owner-occupiers of principle private residences if the interest amount is above a certain limit. For non first time buyers the rate is currently 15% and for first time buyers the rate is currently 25% for year one and two. (Commission on Taxation Report -2009)
Vat: Vat is currently charged at a rate of 13.5% on the sale of a property in the course of a business. However a private individual who wants to sell their own house in which they live is exempt from vat. (Commission on Taxation Report – 2009)
Commercial rates: This is an annual property tax levied by local authorities on the occupiers of commercial and industrial property. Local authorities levy commercial rates on the basis of valuations provided to them by the Valuation Office. (Commission on Taxation Report – 2009)
Development contribution schemes: This is payable by people carrying out development on foot of planning permissions. The funds from this also go to the local authorities. The local authority determines the rate to charge. (Commission on Taxation Report – 2009)
It is debatable in my opinion whether the tax treatment of property in Ireland should be changed. It all depends on what way the revenue commissioners go about it.
On one hand the country is in a major recession and as a result of the property market crashing the government is not receiving half the amount of revenue as they previously were. There is very little buying/selling and building of houses because people simply don’t want taking the risk plus banks are not lending so willingly. As a result of this the revenue received from Stamp Duty, VAT, Capital Gains Tax etc which I have given a brief summary on above have all majorly dropped. From the governments point of view a reform of the tax system is needed so that a more stable form of revenue is being received in order to help sort out Ireland’s major deficit. On the other hand we have the tax payers who have already suffered major cuts due to the recession why should they have to pay more taxes than they already have to. Below I am going to take a look at some of the ways in which the government are proposing to reform the property taxation system in Ireland.
Proposed changes to property taxation in Ireland
“At the height of the boom in 2006 the State took in €1.3 billion from stamp duty. That revenue together with the income from VAT on building materials and from the wages of construction workers is well and truly gone.” (Redden, F - 2010). This is a quote taken from an article in the Irish times and I am sure we will all agree since the recession has hit Ireland the revenue the state has received from stamp duty and other forms of tax on property will have majorly dropped.
As quoted from an article in the Irish times “With just €8 million now being collected on average each month from residential stamp duty, the case for replacing the current regime with a new property tax may never have been stronger”.(Redden, F – 2010).
The government are now proposing to introduce a number of changes to property taxation consisting of the following; (Commission on Taxation Report – 2009)
An annual property tax on residential properties.
Stamp duty for purchasers of principal private residences is zero rated.
Stamp duty on residential housing units purchased for investment purposes is applied at a rate that takes account of the transaction tax rates and thresholds that apply across the EU
The property tax base is widened through the provision of:
An annual property tax on zoned development land.
A Higher rate of CGT on profits and gains from the sale of development land.
Due to the limited amount of words allowed in this essay I am only going to look at the first three of the proposed changes as I think they are most relevant to the title of this essay. I am going to continue on now to explain what exactly these changes are and I will conclude at the end on the arguments for and against them.
Residential property taxation
The government have quite a few proposed approaches for the introduction of the residential property tax in Ireland, however because they are only proposals and the tax has not been officially brought in yet I am only going to give a general summary of what exactly it is and how it will operate.
The main reason the government are proposing introducing a residential property tax in Ireland is to improve the deficit in Ireland’s finances. The residential property tax is basically an annual tax that will be chargeable on the market value of residential property owned and occupied on the date of valuation. (Revenue Commissioners – 2010)
The residential property tax was already operated in Ireland between 1983 and 1997 with disastrous consequences that resulted in insignificant revenue flow for the exchequer and high administrative costs. There was only revenue of €17 million generated in 1996 the last year in which the residential property tax was operated. All relevant residential property owned by an assessable person was charged at a rate of 1.5% in the circumstances where the market value of the property exceeded a limit and where the income of the assessable person exceeded a limit. (OECD Publishing – 2006) The main reason why the residential property tax didn’t work back then was because the tax base was too narrow. In practice, the tax applied to very few people, as it was based on relatively high exemption limits. (The Irish Times – 9th Sept 2010). For example a principal private residence that had a market value of less than ￡101,000 and were the owner-occupier was earning less than ￡30,100 annually was exempt from paying the residential property tax. (Revenue Commissioners- 2010) The exemption limit for the amount of income the owner-occupier was allowed to earn before the property tax was applicable to them was quite high and I can see the property tax did not apply to very many people.#p#分页标题#e#
The cost of the property tax if introduced into Ireland again is expected to range from between €188-€250 a year for houses worth less than €150,000, rising to close to €4,000 for houses valued at between €1 million-€1.5 million. (Reddan, F - 2010)
This tax if introduced will have a much wider tax base and will be applicable to all residential properties in Ireland with the exception of houses rented from local authorities and social housing providers. As the tax will apply to second homes, rented properties and holiday homes the government are proposing to get rid of the €200 levy that they introduced in 2009 as a source of finance for the local authorities. (Commission on Taxation – 2009). In my opinion the €200 levy should most definitely be abolished if an annual tax on property was introduced into Ireland because it would be highly unfair expecting the taxpayer to pay both.
Stamp duty on Principal Private Residents
However if the residential property tax were to be introduced the government are proposing that stamp duty on principal private residents would have to be zero rated.
During the boom time approximately €1.3 billion worth of stamp duty on principal private residents was taken in annually but since the property market has crashed here in Ireland there is approximately only €57 million being taken in annually a big drop I am sure we will all agree. (The Irish Times – 13th July 2010).
Stamp duty on residential housing transactions does not provide a stable enough revenue base for the exchequer as the revenue is to strongly influenced by the housing cycle which I am sure we will also all agree has completely plummeted since the recession and will probably never be the same again. (The Irish Times – 13th July 2010)
I think the government should most definitely zero rate the stamp duty on principal private residences because it is not benefiting the government, the taxpayer and more importantly Ireland as a nation and its current financial position.
Stamp duty on residential housing units purchased for investment purposes
The government are proposing to continue applying the stamp duty on investment residential property houses. (Commission on taxation – 2009)
What the situation is like internationally in relation to Property Taxation
Having looked into Property Taxation in Europe and the UK I discovered that property is largely taxed in two different ways. The first way is based on our current stamp duty regime and the second is by applying an annual tax on property.
In the Irish Times Fiona Reddan wrote an excellent article on property taxation in Europe she looked at the UK, France, Spain and Germany in particular.
In the UK a stamp duty regime is used but it differs from ours in the sense that the rates are a lot less than the rates used here. For example a property valued at between ￡125,000-￡250,000 only incurs a rate of 1 per cent rising to 5 per cent for properties above ￡500,000 from April 2011.
Let’s suppose that a property was purchased in Ireland at a value €450,000 which will at present incur a stamp duty charge of €22,750.In the UK on the other hand let’s suppose a property was purchased at a value of ￡450,000 (€551,057) this will result in a stamp duty charge of ￡13,500 (€16,294). We can see that there is a difference of €6,456 between the two. (Reddan, F – 2010)
Also the stamp duty we have in operation here in Ireland favours first-time buyers because they are exempt from the duty regardless of the value of the property they purchase. Whereas in the UK if the value of the property is above ￡250,000 first-time buyers must pay the duty. (Reddan, F – 2010)
There is however countries in Europe such as France that use both the stamp duty regime and the annual tax on property. There is firstly a stamp duty charge on transactions at a rate of approximately 3 percent on a new property and 7 per cent on a second hand property. So for instance a person having bought a second hand property for let’s say €500,000 in France will incur a stamp duty charge of €35,000 (€500,000 × 7%) and then have to pay an annual property tax on top of that. (Reddan, F – 2010)
In France they have two different types of annual taxes
A taxe fonciere which is determined by the region you live in and costs approximately €1 per square metre per month. (Unknown. (2010). French property taxes. )
A taxe d’habitation which is charged on the basis of the property been rented were the cost is borne by the tenant. (Unknown. (2010). French property taxes. )
In Ireland if a residential property tax is brought in it is proposed that it will be based on the value of the property whereas in France it is based on the size of the property. So for example if we take a basic semi detached house in Ireland that is built on a site that is approximately 100 square metres, using the French tax system the annual property tax would be about €2,400. Whereas in Ireland the tax would be considerably less ranging between €563-€675 for a house valued at €250,000 based on the Commissions proposed annual charge. (Reddan, F - 2010)
In Germany they also use the stamp duty regime and the annual property tax. In Germany the stamp duty regime used is called the real estate transfer tax (RETT) which is charged at a rate of approximately 3.5% rising to 4.5% in Berlin. For example the stamp duty charge applicable to a property valued a €500,000 outside of Berlin would be €17,500. (€500,000×3.5%). (Germany Trade & Invest – 2010) (Reddan, F – 2010)
The annual property tax in Germany is charged based on the location of the property at a rate of approximately 1%. For example the annual property tax charged for a property valued at €500,000 would be around €5,000. (€500,000×1%). This would be added on top of the stamp duty charge. (Germany Trade & Invest – 2010)
In Spain, transfer fees are payable at between 6-7 per cent of the purchase price, with an additional stamp duty at rates ranging from 0.5-1.1 per cent for second-hand properties. (Reddan, F- 2010)
Local property taxes also apply in Spain, based on the rateable value of the property, which may be less than market value, at between 0.4-1.1 per cent. (Reddan, F – 2010)
As we know if an Annual property tax is brought into Ireland the stamp duty regime will be abolished, so compared to our European neighbours we don’t fair out too bad because a lot of them as we have seen charge tax on property using the stamp duty regime and using an annual property tax.
The advantages and disadvantages of Property Taxation
In Ireland at the moment with the recession people are against the introduction of an Annual Property Tax understandably considering the amount of cuts the government have made on our nation as a whole already. I am now going to look into some of the advantages and disadvantages of the introduction of an annual property tax.
Advantages of an annual property tax
It is cheap to administer.(Malame, J.H & Youngman, J.M – 2002)
Property tax tends to remain stable. The market value of property tends not to be effected by the stock market or the economy in general. (FAO – 2010)
People cannot easily avoid payment of property taxation. The reason for this is because the property tax is secured by the property. In other countries were an annual property tax is operated over 95% of people pay the tax levied. (ORPS – 2010)
The revenue received from it is predictable. The level of revenue available from property tax is much more stable than that from income or sales taxes. Sales tax is dependent on consumer behaviour, and income tax is dependent on employment levels, both of which can fluctuate year to year. Land does not move, and property values tend to be more stable over time, compared with employment and spending habits. (FAO – 2010)
The residential property taxation system is very transparent. (FAO – 2010)
As quoted from the Commission on taxation Report “Taxes on property could lead to the more efficient use of underdeveloped land through for example, higher recurrent taxes on vacant property and on underdeveloped zoned land”. (Commission on Taxation Report – 2009)
Disadvantages of an annual property tax
Property tax tends to be in large lump sum payments although in many places today it can be paid quarterly. (ORPS – 2010)
The property tax is levied on property values, or wealth in a sense, and not on income or consumption like the income tax or the sales tax. Thus, those who are cash poor, like many retirees and elderly, may own property which has considerable value but lack the income necessary to pay property taxes. (Malame, J.H & Youngman, J.M – 2002)#p#分页标题#e#
Assessments may be seen as unfair or inequitable. (ORPS – 2010).
Parts of the process can be time-consuming and expensive, for example, compiling a comprehensive list of rateable properties (especially where records are poor or incomplete, or where there are a large number of legal status issues), outsourcing services to the private sector, establishing a valuation tribunal, and administrative and infrastructure support (such as dedicated information technology systems for both the valuation and the financial accounting system for the billing, collection, and enforcement procedures). (FAO – 2010)
Any inconsistencies with property taxation will be magnified to the public because of the transparency of the system. (FAO – 2010)
With property taxation been difficult to avoid or evade it makes it unfavourable in society. (ORPS – 2010)
As we can see from above there is just as many advantages as there is disadvantages to introducing an annual property tax into Ireland. The advantages however have a stronger case over the disadvantages from the government’s point of view because overall introducing an annual property tax is cheap to administer, it is a stable form of revenue compared to stamp duty and it is hard for taxpayers to avoid or evade it. The disadvantages are more from the tax payer’s perspective in the sense that assessments on the value of their property may seem unfair and the taxing of low income earners in general.
Conclusion
Having looked at the current property taxation system in Ireland at the moment and looking at what reforms the government are proposing to make to the property taxation system I think that there is two ends of the coin the government have to look at before making a decision. As I have mentioned above we have to look at matters from the government’s point of view and from the tax payer’s point of view. The government as we know are in major need of some help to fill the financial deficit the country currently has. But we must ask ourselves is bringing in an annual property tax the answer to their problems. Taxpayers have already taken some major cuts why should they have to pay more taxes.
One of the main issues in my opinion that must be taken into consideration in relation to bringing in an annual property tax is the fact that a lot of people are unemployed in Ireland at the moment who owns a property. The government are proposing bringing in a general waiver provision exempting house owners with low incomes but when we look at the current economic situation Ireland is in at the minute a large proportion of people are going to fall into this category. Are the government going to be taken in much revenue at all if this plan goes ahead?
From the governments point of view however bringing in an annual property tax would be a much more stable form of revenue than the revenue coming from the stamp duty regime which is heavily influenced by the housing cycle. If things went accordingly to plan and the government take in as much revenue as they expect to if the annual property tax is introduced this could majorly help Ireland out of the recession.
Overall the government have a lot of work to do and a lot of things to take into consideration if they actually do go ahead with introducing an annual property tax into Ireland. We unlike our neighbouring countries don’t fair out to bad if the annual tax on property is introduced. As we have seen above countries such as France and Germany charge stamp duty and on top of that an annual tax on property.
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