John Gormley (Dublin South East, Green Party)

In October 2008, as part of budget 2009, the Government announced its intention to introduce a €200 charge on non-principal residences and I have arranged that the legislation necessary to give effect to this measure will be published today. The charge will apply mainly to the owners of residential rental property, holiday homes and vacant properties unless the vacant property is newly-constructed but unsold.

The charge is estimated to raise some €40 million annually and it will be collected and retained by local authorities. It is the first locally-based revenue stream to be made available to local authorities since the abolition of domestic rates over 30 years ago. I consider this to be a very significant development - it will reduce the dependency of local authorities on central funding and it will be a stable income stream, unlike the transaction-based property taxes on which our economy had become unduly dependent. These taxes – property-related stamp duty, capital gains tax and value added tax - are volatile and over-responsive to prevailing economic conditions.

More generally, the Commission on Taxation has been asked to examine our taxation system with particular reference to a number of factors, including the options for future financing of local government. I have no doubt that the commission will consider this matter in depth, including the matter of property taxes generally, and I await its report. The Government will give careful consideration to the commission's report, which will be available in the near future.

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