Mr. Roland O'Connell:

Perhaps I could first comment on the residential property tax. In the Society of Chartered Surveyors Ireland, we think the residential property tax is a good idea, not because we welcome new taxes but because we feel it is better than the current stamp duty system. When the property market is booming the economy, in general, is booming and there is considerable revenue from stamp duty. When the economy is not booming the property market is not booming either and stamp duty income drops off. The residential property tax should be used to fund local authorities. Having an annual residential property tax, as opposed to a one-off transaction tax, means local authorities can plan ahead and estimate what their income is going to be.

We have recommended that the property tax be banded. We have not, however, recommended that the bands be limited when the value of a property gets up to a certain level. I have just come from a presentation by a member of the UK valuation office, who said the UK top limit is £3,000. There was also a speaker from the Northern Ireland office, where they have what probably is a better organised and more advanced system. Their band also cuts off at a certain level. The Northern Ireland bands run from A to I, alphabetically, and the UK bands from A to H. That is a policy decision, however, and not something the society would have a view on.

We would echo comments here that the property tax should be straightforward and unambiguous. It should be transparent and clear. The collection should be low-cost and done at a convenient time of the year, that is, not when several other costs are being charged. Most important, it should be easily understood by the public and there should be a level of transparency about how the money is being spent. We believe it should be used to fund local authorities but there should be an onus on the local authorities to explain to taxpayers where their money has gone and how it is being spent.

As for the method and whether the tax should be based on valuation, location, rent or size, that again is a policy decision because all these methods have pros and cons. We have done considerable investigation on this, internationally, and have come to the sad conclusion that there is no perfect way of levying this tax. Within our own society, there is considerable disagreement about which is the best way of doing it and consequently, we have not expressed an opinion as to which is the best way. Much of it comes down to what the policymakers are trying to achieve. For instance, the easiest method for the homeowner to self-assess, which also is the easiest method to be verified by the local councils or whatever the body will be, is purely a size-based one because anyone can measure the size of his or her own house. Any local authority will have records in its planning office as to what is the size of the house.