Deirdre Clune (Fine Gael) | Oireachtas source

That condition has been there since 2010 and we are now implementing it. It is a positive measure in that we will have a more sustainable tax base in the future. We can look back on how spending increased from 2002 to 2007 and beyond that. When the bottom fell out of the property market we were dependent entirely on revenue from VAT and income tax and we know what a vulnerable position we were in. Putting a value-based property tax in place is important for a sustainable future. The OECD, the Commission on Taxation and the ESRI all agree that property tax is less harmful to the economy than any other forms of taxation, particularly taxation on income earned from employment. The objective is to keep tax on income as low as possible.

I am slightly concerned about the market valuation of city properties that will be considered in this respect. There has been considerable discussion about those living in higher valued properties, particularly in cities, although in many instances that may not be the case. The situation has evolved where the market reflects those properties have a higher value now. Many people will never realise the value of their property. Usually they will sell their property and move to a property within a similar market and value of their property will not confer an advantage unless they opt for the rural resettlement programme. The value of their property will be an asset that could be used as collateral or an asset in their estate but most people do not realise the value of their property.

Thee is a concern about the rural-urban divide in this context. When I was a representative of Cork City Council and Cork County Council there was a debate on the large rate base for the county which was in around the city and much of that money was not spent where the local authority members perceived it should have been spent. It was spent in the western part of the county in developing tourism and roads - Cork being one of the largest counties.

As city dweller, I recognise that some of the taxation from this measure that will be raised locally will be used nationally. Some of it will have to be spent to support other issues such as developing tourism, beaches and marine areas which we like to visit. There is a great deal of concern in local authorities as they do not know what proportion of the tax collected in their area they will be allocated. I ask the Minister to convey that concern to the powers that be, particularly the Minister for the Environment, Heritage and Local Government, who will be making these decisions. This is an important consideration.

I wish to raise the issue of rents, which Senator Hayden mentioned. I note from the property website Daft.ie and local reports that the value of a three-bedroomed, semi-detached house in my area varies from ¤375,000 to ¤400,000. That value will be passed on to tenants. A large number of mortgage holders are in distress and a third of landlords are in mortgage arrears. As a State we very much depend on the rental property and as solution to our housing problems. There is a balance in that respect and that needs to be recognised.