CSO findings on wealth, debt and assets should inform policy

Posted on Monday, 10 February 2020
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Data on wealth is important, as it provides a further insight into the distribution of resources and an insight into some of the underlying structural components of inequality.

The results released at the end of January offer robust information on the types and levels of wealth that households in Ireland possess. Some of the key findings are:

  • The median* net wealth** value of Irish households is €184,900
  • Net wealth is highest in the ‘Eastern & Midland’ region with a median value of €212,700
  • The wealthiest 10% of households have a net wealth of at least €835,000
  • The median net wealth of households that own their own home is €287,300
  • The median net wealth for renters is considerably less at €5,900.
  • Over two thirds (67.6%) of the wealthiest 10% of households have received a substantial inheritance or gift
  • Over half (51.5%) of all households have some form of debt
  • Just over one in ten (10.3%) households with the lowest net wealth received a substantial gift or inheritance, compared to almost seven in ten (67.6%) households with the highest net wealth.
  • More than nine out of every ten households (94.3%) own some form of financial asset including savings, shares, bonds, investments and voluntary pensions.
  • The value of the household’s main residence is a key component of wealth.

Taxes on wealth are minimal in Ireland. Revenue is negligible from capital acquisitions tax (CAT) because it has a very high threshold in respect of bequests and gifts within families and the rates of tax on transfers of family farms and firms are very generous. The data points to both inheritance and value of property as being key components of wealth.  The findings of this survey should inform taxation policy in terms of how wealth and assets are treated by the taxation system and when considering options such as a Site Value Tax and any changes to capital acquisitions tax and capital gains tax.

*The median value is obtained by arranging all households in ascending order from the smallest to the largest value and then selecting the middle value. In terms of wealth, the median provides a truer reflection of the average household as it is not influenced by extreme values. 
**Net wealth includes the value of all assets (housing, land, investments, valuables, savings and private pensions) and removes any borrowings (mortgages, loans, credit card debt etc).