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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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  4 o’clock

(Speaker Continuing)

[Deputy Paschal Donohoe: Information on Paschal Donohoe Zoom on Paschal Donohoe] I welcome several aspects of the proposed property tax, but I also have some concerns and observations that I would like addressed. As far as positives go, I welcome the role of the Revenue Commissioners in the collection of the charge. One of the main problems with the implementation of the household tax was that not enough people understood how they could furnish their payments and, moreover, the options for doing so were very limited. It was much easier for people to purchase refuse bags or top-up telephone credit in their local shop than to pay that tax to the State. Second, I welcome the progressive element of the new tax whereby houses valued at more than €1 million will be liable for a higher rate of payment. That is an essential element in any progressive tax system. In that regard, I also welcome the cancellation of the household charge. A flat-rate tax which bears no relation to the value of the asset being taxed is not ideal. Finally, I welcome the inclusion of a deferral system for families whose income circumstances are particularly tough.

On the other side of the coin, I have several concerns regarding the provisions of the Bill. Before setting them out briefly, I am anxious to move away from the notion which some of my colleagues have raised that the tax will mean that urban areas could be subsidising non-urban areas or particular areas in Dublin subsidising other areas in the same county. That is a dangerous path to go down. We already have a situation where the energy produced in one part of Ireland is consumed by another part of the country. Likewise, tax receipts from agriculture, for example, are spent in urban areas. I am wary of pursuing a line which seeks to split people into different categories based on the area or county in which they live.

My first concern regarding the proposed tax is that it will inevitably cause difficulty for people who purchased their homes at a very high price. In this context, I would like to see the date after which a local variation can be introduced brought forward from 2016 to give a greater recognition of the different circumstances throughout the country. Second, more should be done to ensure that funding streams to local authorities are protected. Third, it is important that income thresholds are reviewed. As our economic situation improves and tax revenues continue to grow, this is an area which should be prioritised when it comes to dispersing those dividends. Just as the collapse of the housing sector was one of the causes of the great difficulties we are now facing, we must ensure the implementation of the property tax does not add to the difficulty.

Deputy Pat Breen: Information on Pat Breen Zoom on Pat Breen I welcome the opportunity to contribute to the debate on this Bill. The introduction of any tax is never popular, but particularly so in the midst of the greatest recession since the foundation of the State. Property taxation is the norm throughout the world and the proposed rate of 0.18% compares favourably with the rate in other countries. I note that while Sinn Féin is opposed to the introduction of a property tax in this State, it, as a party of Government in the North, does not seem to have any difficulty with a much higher charge being levied in that jurisdiction. A householder in the North whose home is worth €200,000, for instance, is expected to pay in the region of £1,500 annually in property tax. In this State, on the other hand, the owner of a property of the same value will pay only €202 next year and €405 in a full year. The Government's success in keeping the charge to a minimum is very welcome. Furthermore, the Minister's undertaking not to increase it over the lifetime of the Government offers certainty to householders. This week's edition of The Economist, a very reputable publication, refers to the "modest" property tax being introduced by the Irish Government against the background of a collapse in property prices.

  I recently met with a group of business people in Shannon whose concerns related mainly to local authority rates, which are a significant problem for businesses in every town and county in the country. These particular business owners, from Shannon, Ennis and Kilrush, had their premises valued at the height of the boom and the rates assessed on that basis. Despite the downturn and the reduction in property prices, they are still expected to pay the same rates. The inclusion in the Valuation (Amendment) Bill 2012 of a facility for the revaluation of business premises is particularly welcome in this context. I look forward to discussing the issue when the legislation comes back before the House.

  As we know, the household charge was an interim measure. From the dealings I had with constituents last year, I would agree with my colleague, Deputy Paschal Donohoe, that the problem was not so much that people were unwilling to pay the charge, but that the methods of payment were not very accommodating. In some circumstances, in fact, people found it impossible to furnish their payment. As such, I welcome the proposal that the Revenue Commissioners will conclude a service agreement with An Post whereby people can pay the property tax at their local post office. This will assist home owners in rural areas, especially the elderly, with the added benefit of enhancing the viability of community post offices.

  In line with a similar provision under the household charge, section 7 includes an exemption from the new property tax for charities. Will the Minister clarify whether this includes the residences of priests? Specifically, I have been contacted by the diocese of Killaloe regarding the residences in its area which are registered in the ownership of St. Flannan's (Killaloe) Diocesan Trust, a registered charity. The concern is that the wording of the section seems to suggest that the exemption is conditional on a property being provided for special needs accommodation, which does not match the exemption criteria for the household charge. Ultimately, the charge in this case will be borne by taxpayers on behalf of the parish, so it is an issue the Minister should clarify.

Deputy Dessie Ellis: Information on Dessie Ellis Zoom on Dessie Ellis I propose to share time with Deputy Mary Lou McDonald.

An Leas-Cheann Comhairle: Information on Michael Kitt Zoom on Michael Kitt That is agreed.

Deputy Dessie Ellis: Information on Dessie Ellis Zoom on Dessie Ellis The proposed tax on family homes is not only an attack on those who own their own homes but also on those who rent local authority housing. It is a regressive tax which does not take into account the dire financial circumstances in which so many now find themselves, including the tens of thousands of families in negative equity. It is also an attack on the civil rights of citizens, who will be forced to pay the charge out of their wages or social welfare payment. We are told that the Government has to make tough decisions. Ordinary people are making tough decisions every day, such as whether to put bread on the table or withhold their rent, mortgage, electricity, gas or telephone bills. People are forgoing essentials to make ends meet and eke out an existence. That is how serious living has become in this country. The Government, however, is targeting the least well-off, including women, children, carers and people on low and middle incomes.

I commend Deputy Colm Keaveney and others in the Labour Party on their recognition that enough is enough and the threshold of decency has been passed. We have a serious housing problem in this State. It is a crisis that has been raging for several years, precipitated by the abject failure of every Government since the foundation of the State to deal with the shortage of social housing.

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