A recent Government bill proposes an annual charge of €200 be imposed on owners of certain second and additional properties situated in Ireland. If recent media reports are correct, further annual property taxes will be proposed in reforms which could see the introduction of a new residential property tax and a reduction in stamp duty on property transfers.

Properties, other than the owner’s sole or main residence, which are suitable for use as a dwelling will be subject to the charge. This will include rental properties as well as vacant properties and holiday homes within Ireland. 

The charge is due to commence in the tax year 2009, although no date has yet been set for the determination of the liability to the charge for 2009. For tax years 2010 onwards the liability for payment of the charge will rest with the person who is the owner of the property on 31 March of that year. The owner of the property is the person entitled to receive rent from the property. Failure to pay the charge may lead to a fine of up to €2,000 being imposed.

Certain buildings are excluded from the charge for example, properties of heritage value and those let by certain public authorities. Furthermore, newly constructed properties which remain unsold will not be liable to the charge, provided they have not been used as a dwelling since the time of their construction and no income has been earned from the property. 

In addition, several additional exemptions are proposed including the exemption from liability of those who are forced to leave their residence due to long term mental or physical infirmity. In addition a property occupied rent-free by a relative, situated either on the same site or within two kilometres of the owners residence will not give rise to a charge, for example “granny flats”. This exemption also applies to legal guardianship and ward of court arrangements. An allowance is also made for temporary ownership of a second home for the purpose of moving house.

Landlords will be pleased to learn that single properties with multiple tenants will be liable to a single charge. This will be the case where the relevant letting arrangements are in respect of the bedrooms in the property and the individuals renting the bedrooms are entitled to share with each other any accommodation, facility or amenity in the house.