Homeowners should pay a flat-rate property tax of €500 from next year and pensioners ‘on reasonable incomes’ should be taxed, according to Danny McCoy, director of the employers’ lobby group, IBEC.

McCoy told The Sunday Business Post that a direct, transparent once-off property tax would be the best way to minimise damage to economic growth.

“The political spine has never been there to do this before but we are in a very different place now. Let’s face up to this now: the state needs cash,” he said.

McCoy said the current proposed tax of €100 a home, which would increase over time in line with a site evaluation system, would not generate enough revenue. And he also said it was time some pensioners were brought into the tax net.

“The elderly on a lower income should not have to take a hit, but it is ridiculous tat those on reasonable pensions should not have to contribute something – like every other group across society.”

However, he also described the proposal to reduce private pension relief from 41% to 20% over the next four years as “potentially reckless”.

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