A new stamp duty rate of 6pc kicked in for properties on Tuesday night in an unexpected budget announcement by Finance Minister Jack Chambers.
This year, the measure is predicted to bring in €20m, while next year this will rise to €80m.
However, Fine Gael councillors in well-heeled south Dublin have privately expressed anger over the measure, saying wealthy people already pay their fair share of taxes.
Several councillors confirmed there is anger within the party in the leafy suburbs, where some of the country’s most expensive homes are located.
Councillors also acknowledged the so-called mansion tax will come up on the doors when campaigning for the general election begins.
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“It’s not going to be great on the doors, with people saying, ‘You’re looking to take more money off me’. It won’t go down well,” said one councillor.
One figure branded the move “populist”, while another said people on higher incomes were already paying their fair share of taxes.
“They’re already paying over 50pc rate in taxes,” said a councillor, who spoke anonymously.
“If you want to upsize in the constituency, it will cost you. These houses are not necessarily mansions. They will have to pay higher levels of the Local Property Tax (LPT),” they said.
Some councillors said constituents had already contacted them over the move, raising concerns because they were in the process of buying or selling properties.
“These are wealthy people but they’re crippled with tax already,” said another councillor. “If somebody is selling a property, it impacts on them because the bidders become limited. It impacts the seller. There’s also not a huge amount of houses being sold. It seems like a populist, leftie move,” they said.
“I am surprised, I hadn’t heard it was coming,” said Fine Gael councillor in Dún Laoghaire-Rathdown, Jim Gildea.
Another party figure in the area called the move “a bit strange” and said party colleagues weren’t happy with it.
Currently, buyers pay 1pc stamp duty on the first €1m of a property’s sale-agreed price and 2pc on the rest.
However, now they will pay 2pc on the next €500,000 and 6pc on the balance.
The mansion tax would mean better-off people would pay their fair share, said Mr Chambers.
“I think people that can afford a home at €1.5m can contribute more to our stamp duty system and that’s why having a tiered approach that’s progressive, I think should be how we develop the framework around stamp duty and why it was an appropriate revenue raising measure,” he said.
There are currently 400 properties advertised on Daft.ie around the country with an asking price of €1.5m or higher.
