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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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(Speaker Continuing)

[Deputy Brendan Ryan: Information on Brendan Ryan Zoom on Brendan Ryan] The effects of pyrite have been well discussed in this Dáil term by me and a number of other Deputies. Although progress towards a resolution is slow, we are moving towards a solution. We are not yet at a stage were the pyrite problem has been solved, but at the same time we are on the verge of introducing this local property tax which is to be based on the market value of a property. How much would anyone pay for a house with a pyrite problem? We all know the answer to that question. As the residents of pyrite affected properties will say, they are unable to sell their homes at any price, which, in essence, means such properties have no market value.

  I ask the Minister to introduce an amendment to allow properties with a chronic structural failure caused by either pyrite or the use of substandard materials to be made exempt from the local property tax until such time as such properties are fully remediated. Such a measure would also exempt properties in complexes such as Priory Hall in Dublin. It would be very unfair for the owners of these properties to have to pay a tax on a property that has no market value. The exemption of pyrite affected properties is also recommended in the report of the pyrite panel which was published in July. I ask the Minister to consider my request. It is within his power and gift to ensure these homeowners are given some relief at a time when they are suffering so much. It has been mentioned many times in the House by many Deputies that the overwhelming majority of people who live in pyrite affected homes bought them at or near the height of the boom. They have very high mortgages and many have young families. This has been a difficult week for these middle income families. We now have an opportunity to give them a little comfort by exempting them from the local property tax. I understand there might be some technical impediments but none that cannot be overcome with enough political will, which I believe the Minister has.

  I suggest the proposed lowest valuation band be changed from €0 to €100,000 to €1 to €100,000; and that a separate category of zero valuation be added. This would allow those living in pyrite affected homes, or the residents of Priory Hall, to declare a zero value rate for their properties and be exempt from the tax. The Bill, as it stands, provides that a person who declares a zero valuation for a property will be liable to pay a €90 full-year charge. I understand this would not be acceptable. The Government needs to act for those who have been the victims of cavalier builders and the light touch building regulation that defined Fianna Fáil's period in office.

  The Minister for the Environment, Community and Local Government, Deputy Phil Hogan, is working on delivering a solution to the pyrite problem, generally. A solution will be achieved. However, until that moment comes, a gesture by the Government in the form of an exemption from the local property tax would be a tangible indication to the homeowners concerned that it is serious about addressing their problems. I look forward to the Minister's response and what I hope will be a commitment to exempt these hard-pressed householders.

  The Minister said:

The Government is conscious of the very real costs and difficulties faced by people whose homes have been affected by pyrite. My colleague, the Minister for the Environment, Community and local Government has indicated that he considers that houses demonstrated to be subject to a certifiable level of pyritic heave should receive a waiver from the local property tax. I propose to address this issue in the context of the Finance Bill.

I am concerned about the phrase, "subject to a certifiable level of pyritic heave." It is proposed that householders will be required to pay for certification, but some householders may not be in a position to pay for such tests. I suggest, therefore, that they be permitted to declare that their propertie have zero value. They should not be subjected to further expense to prove to Revenue that their houses have been damaged by pyrite.

  The Minister referred to exemptions for properties in certain ghost estates. He should not base the exemptions on the list drawn up in respect of the household charge. Some estates have been exempted and others should be. A full review is, therefore, required.

Deputy Kevin Humphreys: Information on Kevin Humphreys Zoom on Kevin Humphreys It is nearly 40 years since rates were abolished. The former residential property tax was confined to Dublin. Some speakers have recommended adopting elements of taxation systems in other countries such as the wealth tax in France but not its property tax and another tax from somewhere else. Deputy Richard Boyd Barrett's views on the increase in DIRT were very balanced in the debate on the budget. He said he regarded it as a wealth tax. On the other hand, Sinn Féin does not regard the DIRT as a wealth tax. I listened to Deputy Dessie Ellis's contribution. He and I were councillors. He ran a very efficient campaign against bin charges, the outcome of which was the privatisation of waste services in the Dublin area.

Deputy Dessie Ellis: Information on Dessie Ellis Zoom on Dessie Ellis Labour Party councillors-----

Deputy Kevin Humphreys: Information on Kevin Humphreys Zoom on Kevin Humphreys Now we see the effects of his campaign. Therefore, I take the views of the two previous speakers with a grain of salt.

The Bill provides that commercial and residential properties will be subject to tax in order to fund local government services. I ask the Minister if he will consider a tax on land. I have concerns that the tax cheque is to be handed over to the Custom House with no clear definition of how the money is to be distributed. I, therefore, ask for regulation or legislation indicating how the funds are to be allocated.

It is clear that home owners in Dublin will subsidise those in the rest of the country. Property in Dublin is much more expensive than elsewhere. In most small towns and rural areas house valuations will be in the lower valuation bands. I believe in social solidarity. However, wealthier areas of the country will subsidise less affluent areas. We all pay the same energy charges. Electricity services cost the same in County Kerry as they do in Dublin, even though provision in County Kerry is more expensive. Approximately 48% of the housing stock in County Donegal will be valued at below €100,000. This will mean a charge of €45 per house next year, a reduction of €55 on the household charge. Approximately 43% of houses in County Mayo will be valued in the €150,000 band. The average house valuation in Dublin city will be €300,000. Approximately 33% of homes in the constituency of Carlow-Kilkenny will be valued at the lower rates. The average charge in following years will be €90, a reduction of €10 on the household charge. There will, therefore, be a need for subsidisation to rebalance county council budgets.

This tax should not be seen as a Dublin tax, a Cork tax or a Galway tax. However, it will be difficult to explain to a homeowner in Ringsend that his or her small house is valued at a higher figure than a mansion in Leitrim or that his or her property tax will be used to subsidise hedge cutting in Manorhamilton. Has the Minister considered the introduction of a charge of €5 an acre on productive land? Will he tax brown field sites and land zoned for residential use to limit the number of derelict sites and the rezoning of land in urban areas?

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