BUDGET 2011 PROPERTY TAX

The flat-rate property tax for 2012 announced in the national plan last week will have to be paid on top of the €200 already liable for those who own a second property, The Sunday Business Post reports.

The so-called Non-Principal Private Residence charge has raised €130m since it was introduced in Budget 2009. Around 1.8m householders will be liable for the new tax but it remains unclear if the payment will be incurred by the resident of the owner of the property. If it is the owner, a landlord would have to pay €300 in 2012, rising to an estimated €400 in 2013.

Which begs the question: who will be liable for the tax on the 30,000 homes expected to be possessed next year? According to The Sunday Tribune, industry experts believe this is the figure for the number of homes at risk of being taken back by financial institutions.

“Borrowers in arrears who cannot pay at least 66% of the monthly interest bill on their mortgage will now be vulnerable to foreclosure once their 12-month statutory grace period runs out, even if they have engaged with their lender,” the newspaper says. “Between 15,000 and 30,000 homeowners could fail to meet the new threshold for mortgage forebearance, according to mortgage broker estimates consistent with Central Bank survey data.”