The Finance Minister has rejected a proposal from the International Monetary Fund (IMF) to set the property tax at 0.5% saying it is “two high”.

The suggestion was made in href="http://www.newstalk.ie/2012/news/imf-wants-property-tax-twice-as-high-as-government/"> a review document of the Irish bailout from the IMF.

It would raise €1 billion from 1.6 million households meaning an average tax of more than €600.

It is also twice the value suggested in some quarters of the government themselves.

The international body is also putting pressure on the government to clamp down on social welfare payments and is urging them to introduce means-testing for child benefit.

The IMF says scaling back benefits – including unemployment payments, medical cards, subsidised college fees and the household benefits package – could generate significant savings for the government.

It adds 0.5% is a suitable figure for the property tax which is double the 0.25% figure put forward over the weekend.

It would see the owners of a €200,000 home paying a tax of €1,000.

Minister Michael  Noonan has today revealed that he plans to introduce the new tax on July 1st next year.

However the Minister says households could not afford such a tax as proposed by the IMF.

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