Dublin City Councillor Deirdre Heney has claimed that Dublin families are being ‘fleeced’ by huge inheritance tax bills on modest family homes.
The Dublin Bay North representative has pointed to outcry from many local families who have been shocked at the enormous tax bills they are forced to pay when inheriting their parents’ home. Many have been forced to sell the house just to pay the tax bill.
Cllr Heney explained, “This is a stealth tax that is resulting in unmanageable tax bills for ordinary families across Dublin. Despite the rise in Dublin house prices, the inheritance tax threshold has been reduced to its lowest level in 20 years.
“The level at which a person is liable for inheritance tax has been reduced by 60% in recent years to just €225,000. It means that an only child inheriting their parents’ home is hit with a significant tax bill if the value is higher than €225,000. The reality is that most houses in Dublin are now valued at more than this amount, meaning ordinary families are facing inheritance tax bills.
“The number of people liable for inheritance tax has soared by 34% in the last four years. The thresholds have not been adjusted to take into account the rise in house price, and there is no mechanism for adjusting the levels in line with inflation. The total amount raised from inheritance tax has gone up from 186million in 2010 to €327m last year – a surge of 75%. And tucked away in the small print of this year’s budget is an estimate that there will be a further increase of 21% in inheritance tax revenue this year, jumping to €400m.
“It is very clear from these figures that this is not a wealth tax. Far from it. I have spoken to many local families who have been shocked that they are liable for such a significant amount of tax on a small, modest family home. Parents want to be able to pass on the benefit of their hard work to their children and grandchildren. Many people who work extremely hard for decades to pay their mortgage and build some financial security for their children want to be able to pass on their hard earned assets to their children without triggering an inheritance tax liability.
“I am calling for fundamental reform of the inheritance tax system. It is deeply unfair that ordinary Dublin families who are very far from wealthy are being faced with such tax bills, just because of the rise in property values in the capital. We need to increase the threshold and ensure that the tax levels are adjusted in line with inflation,” said Cllr Heney.