Taxing property is the most effective way to ‘redistribute wealth and target the rich’, an economist has argued.
As Ireland’s property prices and rents continue to surge upwards, Adjunct Professor in Economics at Trinity College John FitzGerald argued that wealth is “very unevenly distributed in Ireland”.
On Newstalk Breakfast, he said many homeowners are very rich - but pay little in tax on their main asset.
“The main form of wealth in Ireland, it’s not like the US where people have stocks and shares, it’s housing,” he explained.
“The top 10% of the population have one third of the housing wealth and there are a lot of people who don’t have houses.
“If you tax property, you tax the people who are lucky enough to own a house - in particular, you’ll be taxing the more wealthy who own really valuable houses.
“So, if you want to redistribute wealth, if you want to target the rich and insulate the poor, taxing property is the way to go.”
New homes under construction. Picture by: PA Archive/PA Images. Professor FitzGerald added that unlike other forms of taxation, property taxes are “impossible to evade”.
“Wealthy people may have some stocks and shares and they may head off to the south of France to live there and avoid paying tax in Ireland,” he said.
“But you can’t move your house from Aylesbury Road to the south of France - there’s no way of evading the tax.
“So, collecting it is cheap and it comes from those who are better off and housed.”
Houses for sale in Dublin. Picture by: Leah Farrell / RollingNews.ie. Professor FitzGerald continued that he has always been confused about why left-wing parties were so adamantly opposed to the property tax when it was introduced.
“The most implacable opponents to taxing the wealthy are People Before Profit and Sinn Féin, who are totally opposed,” he said.
“I’m not sure how the wealthy have got to them and said, ‘Don’t tax property.’
“People who have houses and are on very low incomes, well there’s an exemption for them.
“You don’t take money from people who don’t have the income but the wealthy have both income and very valuable houses - why not tax them?”
The Local Property Tax, which was introduced after Ireland was bailed out by the IMF, is currently fixed at €90 a year for people who own a home worth less than €200,000.
For properties worth between €1,662,501 – €1,750,000, owners pay €2,721.
Anyone with a home worth more than €1,750,000 pays a varying levy of up to 0.3% of the value of the property.
Main image: Houses in Dublin. Picture by: Leah Farrell / RollingNews.ie
