Darragh O'Brien (Fianna Fail) | Oireachtas source

I thank the Minister for his detailed explanation of the Bill. It will come as no surprise to the Minister to hear that Fianna Fáil opposes the introduction of the property tax on the basis that it is the wrong time to introduce it and it is the wrong type of property tax. With regard to the theory of broadening the tax base and looking at how a property tax can be equitably applied, I believe this should be done, although not at this time and for the many reasons outlined by the Minister.

The property tax, in terms of structure, is an anti-urban and, in particular, anti-Dublin tax. It is a value-based tax. I live in a three-bedroom terraced house. Many of my neighbours purchased their houses in 2007. In 2007, a three-bedroom terraced house in the area in which I live cost ¤580,000. Those who own those houses would be lucky to get ¤300,000 for them now. The situation in regard to mortgage arrears, in respect of which I will put questions to the Minister later, is progressively worsening. The Minister mentioned the Personal Insolvency Bill, aspects of which I welcome. What I really want to know - I put this question to the Minister on each occasion he comes to this House, where he is very welcome - is this: where are the mortgage arrears resolution strategies from our banks? I am not speaking about the people who will have to press the nuclear button under the Personal Insolvency Bill, which means that people will effectively lose their homes; rather, I am speaking about the people who are currently managing to make their mortgage repayments and the long-term measures needed to free up some of their income. If we were to do that first, I would then be willing to consider a site-value-type property tax.

Given the number of times the Minister and Government have renegotiated the Memorandum of Understanding, it is clear that a measure can be replaced with another of equal value. I agree in theory with the introduction of a property tax. However, I believe that in this regard the Government's timing is wrong due to the mortgage arrears situation, with more than one in four people in mortgage arrears of between 30 and 90 days. Approximately 4% of mortgages are in arrears of over two years. The situation is not getting any better, for many of the reasons of which the Minister and I are aware and which have been discussed in this House.

Yesterday I asked the Leader a question about local authority and voluntary housing. What contact has been made between the Department of Finance, the Department of the Environment, Community and Local Government and the local authorities? Fingal County Council agreed its budget yesterday. The cost next year to Fingal County Council in respect of the provision of 5,079 social houses will be ¤1.6 million. When my Fianna Fáil colleagues asked the officials of that council where that money would come from, they could not answer. They also could not say whether there had been any contact between the council and the Department of Finance. Colleagues who raised the same issue with Dublin City Council also got no answer from that council's officials. It is important we get this right.

The Minister stated that he proposes to engage with the voluntary housing sector. How are voluntary housing providers such as the North and East Housing Association Limited, the Iveagh Trust, Clúid and so on to pay these bills? I welcome the publication of the Thornhill report, which recommends that local authorities not be subject to the property tax because it would be a circular financial transaction. This is supposed to be a tax that will fund local authorities. How are local authorities to pay this tax? If they are required to pay it they will have to either increase rents or reduce service provision to citizens. This issue needs to be addressed. Fianna Fáil has tabled a series of amendments on Report Stage, at which point we can go through the specifics in this regard.

While I do not welcome this Bill in the context of its introducing a property tax, I thank the Minister for the important exemption from payment of this tax of people whose homes are affected by pyrite. I commend the Minister on that, as I commended the Minister for the Environment, Community and Local Government, Deputy Hogan, yesterday. It is a growing problem. My colleagues in the Seanad are sick to death hearing me raise it in this House, which I have done many times during the past eight or nine months. While I do not welcome the property tax, the exemption in respect of people whose homes are affected by pyrite is welcome.

There is another issue of concern for people who, like me, are living in managed housing estates or apartments and are paying management fees of up to ¤1,900 per annum. Such people derive little or no service from their local authority. They pay their own insurance, contribute to the sinking fund for their estate and pay for all services in the estate, including bin collection. These people are liable for this property tax. Many of the apartments in which these people live - I discussed this issue earlier with Senator Hayden - are of little value and are worth far less than what was paid for them.

There is an opportunity here. We must also consider those people who are paying substantial fees. If I may say so, the Minister answered well on the matter of deferral and the interest he will charge for that. I do not know who he is accusing of scaremongering on that point but in his budget announcement it was clear what was meant. It is not a punitive charge. What concerns me more is the strict nature of the criteria required to obtain a deferral. These are complex and one would have to be earning almost nothing to qualify. This may certainly assist pensioners, and I can see where the Minister is going in that regard, but I refer to households which used to have two incomes, now have one and are already in mortgage arrears, in a worsening situation. I do not see how this property tax will help that situation but I can see where it will make it worse. If people get a letter from Revenue, or from the Minister's neighbours or friends - he has passed collection of this to Revenue which, in my view, he should not have - in many instances they will have to decide whether they will pay Revenue the ¤500 or ¤600 a year, or pay their bank. I know who I would pay, namely, Revenue. The crux here is the long-term mortgage arrears resolution measures. I know it is not easy. I have asked the Minister a question on this before which is on the record of the House. The Central Bank received mortgage arrears resolution measures on 30 September. We have seen no suite of products but we have heard AIB state it would contact 18,000 customers a month. That is fine and I welcome it. This is the nut that can be cracked and if we can do that we can look forward to a future situation in which we can properly introduce a property tax.

I know this will be done in any case and nothing I say in the Chamber tonight will change that. The Minister rammed the legislation through the Dáil, with 88 amendments in three hours and using a guillotine. It went through that House and much the same will happen in this one. The Bill will be passed, will become law and everybody in Dublin will be paying probably twice or two and a half times the average payment in the rest of the country. Many of these people do not even derive a service from the local authorities, are in negative equity and cannot pay. It is the wrong time and it is the wrong tax. We will discuss it in more detail tomorrow, in the specific amendments. I thank the Minister for his presentation.