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Finance (Local Property Tax) Bill 2012: Second Stage (Continued)

Friday, 14 December 2012

Dáil Éireann Debate
Vol. 786 No. 4

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  1 o’clock

(Speaker Continuing)

[Deputy Michael Noonan: Information on Michael Noonan Zoom on Michael Noonan] Part 10, which covers sections 64 to 118, contains provision for the deduction at source of the local property tax from Irish wages, salaries and pensions, from certain payments made by the Department of Social Protection and from certain payments made by the Department of Agriculture, Food and the Marine. This part also provides that the deduction-at-source provisions may, by order of the Minister for Finance, be extended to cover payments made by other Departments or State bodies. Deduction at source from salary or other regular payments will probably be the most convenient method of payment of the local property tax. Where an employee opts to have the tax deducted from his or her salary, employers will be obliged to pay the tax to Revenue in the same way as income tax and PRSI are paid.

Part 11, comprising sections 119 to 129, includes the collection and enforcement provisions for the tax, including the due date for payment, the application of the collection and recovery provisions in the Taxes Consolidation Act 1997 to the local property tax and provisions allowing for payment to be made to payment service providers. This Part provides that any unpaid local property tax will continue to be a charge on property and that unpaid tax will be payable on the sale of that property. It also provides that an individual will not receive a tax clearance certificate if he or she has not paid local property tax unless the individual qualifies for a deferral.

Part 12, which includes sections 130 to 139, provides for deferral of payment of local property tax in the case of properties occupied as a sole or main residence. The income thresholds for a full deferral will be €15,000 for a single person and €25,000 for a couple, whether married persons, civil partners or cohabitants. A person may claim a deferral if their income will not, "as can reasonably be foreseen at the liability date" exceed these thresholds in that year. A deferral of up to 50% of the local property tax liability will be possible where the gross income of the liable person does not exceed €25,000 for a single person or €35,000 for married persons, civil partners or cohabitants.

An increased income threshold applies in the case of properties occupied as a sole or main residence and subject to a mortgage. In such cases, the gross income thresholds may be increased by 80% of the mortgage interest payments. A deferral option in qualifying cases in this regard will apply until the end of 2017 and will assist individuals currently in mortgage distress.

Where a liable person no longer satisfies the necessary conditions, amounts deferred prior to the date on which eligibility ceased may continue to be deferred. Where the spouse or partner of a liable person dies and the income thresholds for a deferral are no longer satisfied, deferral may continue until the next valuation date. Where a property is transferred by way of a gift or inheritance, the Revenue Commissioners may allow an existing deferral to continue if the recipient of the gift or inheritance would in his or her own right be eligible and makes a valid claim for a deferral. Full or partial payments may be made against deferred amounts. Deferred amounts become payable on the receipt of windfall gains such as an inheritance. Simple interest of 4% per annum will apply to any amounts deferred.

Part 13, made up of sections 140 to 144, includes the standard Revenue powers provisions, including the right for Revenue officials to make inquiries about property and its ownership and inspection of relevant records. Part 14, comprising sections 145 to 150, deals with offences and penalties. A maximum penalty of €3,000 applies for failure to submit a true and complete return. A similar penalty applies for knowingly making a false statement for the purpose of obtaining any advantage to which the person is not entitled. Interest on late payment of the tax is at the standard Revenue rate of 8% per annum.

Part 15, covering sections 151 to 153, provides that certain persons and bodies will be obliged to supply information on residential properties to the Revenue Commissioners when required to do so, including providers of gas and electricity, An Post, the Minister for Social Protection, the Minister for Agriculture, Food and the Marine and local authorities. The information from these bodies will assist in compiling the register of residential properties.

Part 16, comprising sections 154 to 156, contains provisions in regard to the household charge. The household charge will no longer be payable from 1 January 2013. Arrears paid before 30 April 2013 will be capped at €130. Amounts outstanding after 1 July 2013 will be increased to €200 and added to local property tax due on the property, to be collected by the Revenue Commissioners. This is an important assurance for people who paid the household charge that non-payment of the charge will not be ignored and that arrears will be collected by the Revenue Commissioners.

Part 17, covering sections 157 to 159, contains various supplementary provisions, including a provision for payment of local property tax by the Minister for Finance into the Local Government Fund from 2014.

I thank the officials of my Department and the Revenue Commissioners who worked to produce this Bill. I also thank officials of the Department of Social Protection, the Department of Agriculture, Food and the Marine, the Department of the Environment, Community and Local Government, the Local Government Management Agency, the Property Registration Authority and other Government agencies, who have worked on matters relating to the introduction of the tax, both on the interdepartmental expert group and on the group chaired by Revenue to prepare for the introduction of the tax.

The key objective of the Government is to support the creation of jobs and this was evident in the supports that I included in last week's budget for SMEs and for the different sectors of our economy. The local property tax will broaden the tax base that funds our vital public services in a manner that does not directly impact on employment. The tax is also structured to adhere to the Government's other key objective to be fair and progressive - the wealthiest will pay the most.

It is unfortunate that so far in the budget debates the Opposition has failed to propose realistic positive measures that support job creation. The Opposition has resorted to opposing many of the key elements of the budget that are necessary to bring about the fiscal stability that is essential for long-term economic growth and job creation. Unfortunately, Opposition Members appear to be engaged in opposition for opposition's sake. Fianna Fáil is opposing a commitment it made in Government. Sinn Féin is opposing a tax that it uses for the funding of public services in Northern Ireland. The left-wing representatives here are opposing a tax that is at the very core of Marxist teaching - a tax on capital assets.

Deputy Mick Wallace: Information on Mick Wallace Zoom on Mick Wallace It is a joke.

Deputy Thomas P. Broughan: Information on Thomas P. Broughan Zoom on Thomas P. Broughan The Minister is a Marxist now.

Deputy Michael Noonan: Information on Michael Noonan Zoom on Michael Noonan I encourage the Opposition to join the Government in suggesting positive measures that will support job creation and secure the funding for public services. I commend the Bill to the House.

Deputy Tom Hayes: Information on Tom Hayes Zoom on Tom Hayes Deputy Clare Daly looks a little rattled.

Deputy Phil Hogan: Information on Phil Hogan Zoom on Phil Hogan Deputy Wallace is not left wing.

Deputy Michael McGrath: Information on Michael McGrath Zoom on Michael McGrath I wish to share time with Deputy Cowen.

An Leas-Cheann Comhairle: Information on Michael Kitt Zoom on Michael Kitt Is that agreed? Agreed.

Deputy Michael McGrath: Information on Michael McGrath Zoom on Michael McGrath I reiterate our opposition to the Bill being rammed through the Dáil with such haste. That Second Stage is being guillotined today and Committee and Remaining Stages are being pushed through on Tuesday, which is unacceptable and unnecessary. This tax will come into effect, as such, on 1 July 2013. I see no logical reason for this House not to consider this Bill in its own time in January. It should give detailed consideration to amendments and have the necessary legislation, if that is the Government's choice, in good time for it to be established. There is no justification for what is proposed, particularly given that the Thornhill report was only published last Friday. The legislation was only published last Friday even though the Government has had the Thornhill report - which has sat in the office of the Minister for the Environment, Community and Local Government, Deputy Hogan - since last June, as I understand it.

The initial deadline given to the Opposition for the submission of amendments was 11 a.m. on Wednesday, 12 December - two days before the Second Stage commenced. That was a joke and an insult. Eventually that was extended and amendments now need to be tabled by close of business today and will be taken in the House on Tuesday. There is a better way for us to do our business. We need to show some more maturity in how we conduct our affairs. The Bill could be properly debated in the fullness of time without impacting in any way on the Government's budgetary arithmetic.

The Minister, Deputy Noonan, concluded his speech by saying: "This tax is also structured to adhere to the Government's other key objective to be fair and progressive - the wealthiest will pay the most." That is simply not the case.

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