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Finance (Local Property Tax) Bill 2012: Second Stage

Friday, 14 December 2012

Dáil Éireann Debate
Vol. 786 No. 4

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Finance (Local Property Tax) Bill 2012: Second Stage

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan I move: "That the Bill be now read a Second Time."

The introduction of the local property tax will deliver significant economic and fiscal reform through broadening the revenue base to pay for vital public services in a manner that does not directly impact on employment. It will be fair and progressive, with the owners of the most valuable properties paying the most property tax.

The Government also sees the necessary introduction of this tax as an opportunity for very real political reform at local government level. The local property tax will provide a stable funding base for the local authority sector, incorporating appropriate elements of local authority responsibility. This will strongly reinforce local democratic decision-making and encourage greater efficiency by local authorities on behalf of their electorates.

A notable feature of Irish taxation in recent decades has been the almost complete absence of an annual or recurring tax on residential property. Rates on domestic properties were abolished in 1978 and the funding shortfall was met by direct Exchequer transfers to local authorities and other means of funding, primarily through the use of fees and charges for local authority services. Domestic rates were partially replaced by the introduction of a residential property tax in 1983. However, residential property tax proved ineffective because of its narrow base, the perceptions of unfairness, complicated administration and low yields. It was effectively abolished in 1996.

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