Tax authority warns property tax freeze could be challenged in court

Chartered Accountants Ireland (CAI) has warned the Government that plans to freeze property tax in Ireland could potentially be challenged in court.

Brian Keegan, director of taxation at CAI, told the Irish Examinerthat the Government could expose itself to a constitutional challenge similar to the unsuccessful High Court challenge to the residential property tax introduced in 1983.

According to Mr Keegan, a challenge is possible if Finance Minister Michael Noonan pushes forward with plans to use property valuations from May 2013 to calculate annual property tax bills until 2019.

Mr Noonan last month indicated his support for a freezing of the current tax until a new tax is introduced in 2019.

However, Mr Keegan said this could lead to anomalies like new developments achieving higher valuations than older neighbouring properties, which could lead home-owners to challenge the State in court.

He explained: “As residential property prices increase and more new houses are built, we may even see properties being marketed as being ‘pre-May 2013’, with lower local property tax valuations than new residences.”

Mr Noonan has maintained that freezing property tax for administrative reasons while a new tax is put into place is compatible with the Constitution.