Ireland is a high-welfare nation where various social welfare expenditures account for approximately one-quarter of recurrent government spending. Its per capita expenditure has surpassed that of countries like the United Kingdom and France, ranking eleventh in the world. The Irish social welfare system covers all internationally recognized forms of social security, combining social insurance and social assistance programs to provide financial support for the elderly, the sick, the unemployed, and other groups. The system primarily includes: support for job seekers, low-income classes, exemptions or reductions in dental and ophthalmic medical fees, and various secondary benefits, such as pensions, subsidies for fuel, television licenses, and telephone rental fees. This is one of the reasons people choose to immigrate to Ireland through investment.
Recently, the Economic and Social Research Institute (ESRI) in Ireland pointed out that the property tax the Irish government plans to levy will be fairer and more reasonable than the current temporary property tax, as the existing tax system has a significant impact on low-income groups.
According to a recent study by the Economic and Social Research Institute, a property tax can exert a certain degree of pressure on high-income groups while safeguarding the vital interests of low-income individuals.
In accordance with the requirements of the bailout agreement signed with the European Union and the International Monetary Fund (IMF), the Irish government has committed to introducing a comprehensive property tax in 2014. An Irish inter-departmental expert group established in February of this year recommended that the government consider implementing this new tax during a transition period from 2013 to 2014.
According to a poll by the Irish firm Paddy Power, the average annual household property tax payment of 100 euros has caused public dissatisfaction. 39% of taxable households indicated they were unwilling to pay, while nearly two-thirds (65%) of voters believe that property tax is unfair to low-income groups.
The Economic and Social Research Institute noted that the introduction of property tax will have a certain impact on low-income groups. However, researchers found that the government can mitigate these negative effects by adopting income-based tax exemption thresholds—specifically, an income ceiling of 15,000 euros per month for single earners and 25,000 euros per month for couples. Furthermore, elderly individuals relying on pensions and low-income groups living on social welfare benefits may be exempt from paying the property tax.