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Leaders' Questions

Wednesday, 12 December 2012

Dáil Éireann Debate
Vol. 786 No. 2

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Leaders' Questions

An Ceann Comhairle: Information on Seán Barrett Zoom on Seán Barrett Before beginning Leaders' Questions, I again appeal to those who are either asking or answering a question to adhere to the rule, which is two minutes to ask a question and three minutes to reply, with a minute for a supplementary and a minute to reply. I do not want to have to constantly interrupt Members and they can please assist me by sticking to the time limits, or else change the rules of the House. I call Deputy Martin.

Deputy Micheál Martin: Information on Micheál Martin Zoom on Micheál Martin We learned this morning that the Government has agreed to legislate to facilitate banks in repossessing family homes. Yet, the 170,000 people in mortgage arrears and those whose homes are about to be repossessed will be still forced to pay the family home tax. The family home tax, or property tax, Bill was published yesterday and is being taken on Friday and rushed through the House, with a vote on Friday. The Thornhill report was published only on Thursday, although it had been with the Government since June. There will be no adequate time for discussion or debate, with very substantial powers going to Revenue in terms of entering homes, inspecting properties and so forth.

All of this is to ram through the House what is essentially a very unfair tax because absent from the tax and the legislation is a fundamental canon of any taxation law, which is the ability to pay. In society today, at this very moment, many people simply do not have the ability to pay this tax - we are talking about the unemployed, people on welfare payments, pensioners, people on family income supplement, the lowest paid workers and people on farm assist. They do not have the capacity to pay the level of property tax that is being put on them by this budget and by the Government.

We must remember that some 500,000 people are living in households where mortgages are in arrears. Yet, for some unknown reason, they are expected and asked to pay a significant family home tax, all in the context of a dead property market.

An Ceann Comhairle: Information on Seán Barrett Zoom on Seán Barrett A question, please.

Deputy Micheál Martin: Information on Micheál Martin Zoom on Micheál Martin We are saying quite openly that now is the wrong time to put such a burden on people on whom the financial pressures are enormous. The situation has got much worse with regard to unemployment and so on. Does the Taoiseach agree the pressures now facing the categories of people I have outlined are such that they are not in a position to pay this tax that is being levied upon them?

The Taoiseach: Information on Enda Kenny Zoom on Enda Kenny The position in regard to the property tax has been outlined by the Minister for Finance in the budget. The property tax will apply for a half year for 2013 and for a full year from 2014. The valuations will be set in bands of €50,000 and the tax will be levied at 0.18%, with a 0.25% charge for those who have houses that are valued at more than €1 million and in respect of the element of the valuation over €1 million.

The structure has been set out by the Revenue Commissioners. The introduction of the Bill is to make way for that process to apply. The Minister has outlined the understanding of the difficulty that people have these days in the economic circumstances in which the country finds itself. Arrangements are made and allow for a deferral in certain circumstances for people who find themselves in a situation where they cannot afford to meet the level of the property tax.

As Deputy Martin is aware, the introduction of a property tax in this country is with the intention of broadening the tax base. A situation has applied for many years where, year after year, local authorities found an easy way of increasing rates on commercial premises, which has placed an inordinate strain upon them and, given the difficulties about the confidence in the indigenous economy, it is necessary that the tax base be broadened. The property tax will be used, and the majority of it applied and spent, in the local authority areas where it is raised for services for people. I expect local authorities will publish their schedules of work so people will understand the property tax they pay goes for services for themselves and their families in the areas in which they live.

It is true that many people are now in straitened economic circumstances. That is why the level of the property tax was pitched at 0.18%. The valuation in terms of the banding is fair and progressive and those who have more and who have houses with higher valuations-----

Deputy Michael McGrath: Information on Michael McGrath Zoom on Michael McGrath And higher mortgages.

The Taoiseach: Information on Enda Kenny Zoom on Enda Kenny -----will be able to contribute more. The deferral options are there for those who find themselves in particular circumstances.

  It is being brought in on Friday to make arrangements for the passing of the Bill so the Revenue Commissioners can make arrangements that it apply from 1 July next year, with a full year in 2014 and thereafter.

Deputy Micheál Martin: Information on Micheál Martin Zoom on Micheál Martin In the past two years unemployment has gone up and mortgage arrears have gone up significantly while economic growth is down and the property market is dead. How can the Taoiseach or this House say to people who cannot pay their mortgage-----

Deputy Derek Keating: Information on Derek Keating Zoom on Derek Keating Why is that?

Deputy Noel Coonan: Information on Noel Coonan Zoom on Noel Coonan It is their record.

Deputy Micheál Martin: Information on Micheál Martin Zoom on Micheál Martin If people cannot pay their mortgages, how can they pay a property tax on that house?

Deputy Bernard J. Durkan: Information on Bernard Durkan Zoom on Bernard Durkan His party is the cause of it.

Deputy Micheál Martin: Information on Micheál Martin Zoom on Micheál Martin It defies any logic and goes against any concept of ability to pay. If somebody paid €25,000 or €30,000 in stamp duty in the past three, four or five years, they believe they have paid their property tax.

Deputy Bernard J. Durkan: Information on Bernard Durkan Zoom on Bernard Durkan They caused that.

An Ceann Comhairle: Information on Seán Barrett Zoom on Seán Barrett Order, please.

Deputy Micheál Martin: Information on Micheál Martin Zoom on Micheál Martin So does the Commission on Taxation, which advised they should be exempt for seven years from any property tax that was brought in.

An Ceann Comhairle: Information on Seán Barrett Zoom on Seán Barrett Does the Deputy have a question?

Deputy Micheál Martin: Information on Micheál Martin Zoom on Micheál Martin More than €5 billion has been paid in stamp duty. How are we expecting unemployed people to pay this? The higher the value of some houses, the higher the mortgages. The issue is that, because of their financial circumstances, people are simply not in a position to pay.


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