Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance) | Oireachtas source

I move amendment No. 121:

In page 120, between lines 25 and 26, to insert the following:

“Report on second home tax and landlord’s tax

74. Within 6 months of the passing of this Act, the Minister shall produce a report on abolishing the local property tax for family homes and establishing, instead a second home tax and a landlord’s tax that would be imposed on the owners of multiple properties.”.

The local property tax, LPT, was sold to us at the time it was introduced on two grounds, if my memory serves me right. The first was it would dampen the property market and help prevent the stratospheric rises in property prices that had preceded the crash of 2008. That was one of the claims made for the property tax or the family home tax, as we like to call it. It self-evidently has not achieved that when we look at where property prices have gone in recent years. Despite the imposition of the local property tax it has done less than zero to dampen the property market in any shape or form. That justification for the local property tax has not withstood the test of reality.

The other claim made for it was that it would mean more money for local services. We would have more money for local government and badly-needed local services. That absolutely has not happened. In fact, the opposite happened in many cases. Euro for euro, whatever revenue has been and is raised through the property tax has been reduced, in terms of central Government funding, for local government. There was no increase in the amount of money available for local services. I thought it said it all when I read a report in Dún Laoghaire-Rathdown County Council which stated that since the imposition of the local property tax it has had less revenue in the transport department. That was just one department, but I thought it was interesting to see "less money for local government" written in black and white. As we speak, the budget is being debated in Dún Laoghaire-Rathdown County Council. As we speak, it is cutting the retrofit and recycling programmes and increasing rates. One wonders where all this extra money that we were supposed to get from the local property tax is. That is what is happening.

Neither of the two aims we were told the local property tax would achieve have been achieved. In both cases, things still continue to move in the opposite direction. What happened was that people had imposed on them a very unfair and regressive, by any definition, tax on the family home. People worked very hard, earned the money and bought the house to put a roof over their heads. It was not to buy a commercial, money-making or wealth producing asset but just to put a roof over their heads and they get taxed again on it, in many cases having paid stamp duty. It is very unfair.

There are areas where the property prices are not in any sense in the control of the people who live in those properties, my area being an example, but this is true in many parts of the country. I do not want to single out south Dublin but if one happens to live in a former council house that one bought, which now in my area might sell for €400,000, one could be on a State pension yet is hit with a tax that is related to a market valuation of that property, which could shoot up significantly at some point and, I suspect, almost certainly will after the next general election. It is just not fair. I do not understand how anybody could describe it as fair. It is self-evidently not fair because one's income might be the same as somebody who lives in a house exactly the same size but in an area where house prices are lower. That is just not fair.

I am suggesting that the Government acknowledges that at least we have an argument in saying that and looks at an alternative that would be genuinely progressive. I refer to having a genuine wealth tax, which would be a progressive tax on second and more properties because if one has a second home, one is starting to talk about wealth. If one has three, four or five properties, one is talking about real wealth. One is not talking about a roof to put over the heads of one's family. One is talking about wealth-producing assets.

In recent years, in our alternative budget submissions, we proposed to do precisely that and that it would be genuinely progressive and based on it being real wealth-producing assets. Does the Minister think that would be fairer and would it not be something he might consider looking into?