Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

Part 3, made up of sections 11 and 12, contains the rules regarding liable persons. In general, the liable person will be the person who is the owner of the property. A person with a leasehold interest is liable if the term of the lease can equal or exceed 20 years or where a person has a life interest in the property. In the case of property held under trust, the trustees and beneficiaries are jointly and severally liable for the tax. Where the property is occupied rent-free on a long-term basis but there is no proof of ownership or documentation establishing the interest that the occupier holds in the property, the occupier may be regarded as the liable person.

Part 4, comprising sections 13 to 21, contains the charging provisions of the Local Property Tax Bill. The first valuation date will be 1 May 2013 and the valuation on this date will be valid from 2013 to 2016 inclusive. Thereafter, the valuation date that will apply will be 1 November in the year preceding each three year period so the valuation date for the period 2017 to 2019 will be 1 November 2016. Where the liable person changes between valuation dates - that is, where the property changes hands - the chargeable value will continue to apply to the new liable person.

Section 15 provides that where a liable person makes a self-assessed valuation in accordance with guidelines issued by the Revenue Commissioners and pays the annual amount of tax due, the Revenue Commissioners will not seek to replace this self-assessment with a Revenue assessment. This provision will not apply where the chargeable value of a property exceeds €1 million.

Section 16 contains the charging provisions for local property tax. The tax will be introduced in 2013 and will be payable by the liable person. Joint owners will be jointly and severally liable for the payment of the tax. The Revenue Commissioners may pursue one of the joint owners for the full liability. Payment by that person discharges the debt to the Revenue Commissioners of all of the jointly liable persons.

Section 17 sets out the methodology for calculating the local property tax payable for a residential property. The section contains a table with an initial valuation band of €0 to €100,000 plus 18 valuation bands of €50,000 from €100,000 to €1 million and the respective mid-point for each valuation band. A rate of 0.18% is applied to the mid-point of a valuation band to determine the tax payable. If the market value of a residential property exceeds €1 million, a rate of 0.18% applies to the chargeable value up to €1 million and a rate of 0.25% applies to the remainder of the chargeable value over €1 million, with no banding applied. As I stated on budget night, the rates of local property tax will not be changed for the lifetime of this Government. The tax payable in 2013 will be half the full year rate.

Section 20 enables local authorities to increase or decrease the rate of local property tax by a "local adjustment factor" which cannot exceed 15% above or below the national central rate. The extent of this variation will solely be a matter for the relevant local authority. However, the Minister for the Environment, Community and Local Government may make regulations regarding the setting of the local adjustment factor. Such regulations could cover matters to which local authorities should have regard when setting a local adjustment factor, public consultation procedures and other procedural matters deemed necessary by the Minister.

Part 5, which comprises sections 22 to 26, contains the standard care and management provisions for Revenue, including the four year time limit on repayments, delegation of functions to authorised officers, and allowing for electronic means of return. Part 6, covering sections 27 to 32, deals with the register of properties to be maintained by Revenue, including the obligation of liable persons to register with the Revenue Commissioners by making a return.

Part 7, made up of sections 33 to 46, relates to the making of returns of local property tax to the Revenue Commissioners. As indicated, the Bill provides for a self-assessment system and allows for electronic submission of returns by owners of multiple properties and for submission of returns by agents and lessees. This Part also provides that a failure to submit a local property tax return will lead to surcharges for late submission of Income tax and corporation tax returns.

Part 8, comprising sections 47 to 60, deals with Revenue estimates and assessments. Revenue will make an estimate of the amount of local property tax due in respect of a property, and will notify the liable person. Revenue may amend this assessment if they subsequently consider it to be excessive or insufficient. If a liable person does not submit a local property tax return containing a self-assessment of the local property tax payable, the Revenue estimate will become due and payable. Revenue assessments will be subject to the normal appeal procedures.

Part 9, comprised of sections 61 to 63, contains the usual appeal procedures for taxes under the care and management of the Revenue Commissioners.

Part 10, which covers sections 64 to 118, contains provision for the deduction at source of the local property tax from Irish wages, salaries and pensions, from certain payments made by the Department of Social Protection and from certain payments made by the Department of Agriculture, Food and the Marine. This part also provides that the deduction-at-source provisions may, by order of the Minister for Finance, be extended to cover payments made by other Departments or State bodies. Deduction at source from salary or other regular payments will probably be the most convenient method of payment of the local property tax. Where an employee opts to have the tax deducted from his or her salary, employers will be obliged to pay the tax to Revenue in the same way as income tax and PRSI are paid.

Part 11, comprising sections 119 to 129, includes the collection and enforcement provisions for the tax, including the due date for payment, the application of the collection and recovery provisions in the Taxes Consolidation Act 1997 to the local property tax, and provisions allowing for payment to be made to payment service providers. This Part provides that any unpaid local property tax will continue to be a charge on property and that unpaid tax will be payable on the sale of that property. It also provides that an individual will not receive a tax clearance certificate if he or she has not paid local property tax, unless the individual qualifies for a deferral.

Part 12, which includes sections 130 to 139, provides for deferral of payment of local property tax in the case of properties occupied as a sole or main residence. The income thresholds for a full deferral will be €15,000 for a single person and €25,000 for a couple, whether married persons, civil partners or cohabitants. A person may claim a deferral if their income will not, "as can reasonably be foreseen at the liability date" exceed these thresholds in that year. A deferral of up to 50% of the local property tax liability will be possible where the gross income of the liable person does not exceed €25,000 for a single person or €35,000 for married persons, civil partners or cohabitants.

An increased income threshold applies in the case of properties occupied as a sole or main residence and subject to a mortgage. In such cases, the gross income thresholds may be increased by 80% of the mortgage interest payments. A deferral option in qualifying cases in this regard will apply until the end of 2017 and will assist individuals currently in mortgage distress.

Where a liable person no longer satisfies the necessary conditions, amounts deferred prior to the date on which eligibility ceased may continue to be deferred. Where the spouse or partner of a liable person dies and the income thresholds for a deferral are no longer satisfied, deferral may continue until the next valuation date. Where a property is transferred by way of a gift or inheritance, the Revenue Commissioners may allow an existing deferral to continue if the recipient of the gift or inheritance would in his or her own right be eligible and makes a valid claim for a deferral. Full or partial payments may be made against deferred amounts. Deferred amounts become payable on the receipt of windfall gains such as an inheritance. Simple interest of 4% per annum will apply to any amounts deferred.

Part 13, made up of sections 140 to 144, includes the standard Revenue powers provisions, including the right for Revenue officials to make inquiries about property and its ownership and inspection of relevant records. Part 14, comprising sections 145 to 150, deals with offences and penalties. A maximum penalty of €3,000 applies for failure to submit a true and complete return. A similar penalty applies for knowingly making a false statement for the purpose of obtaining any advantage to which the person is not entitled. Interest on late payment of the tax is at the standard Revenue rate of 8% per annum.

Part 15, covering sections 151 to 153, provides that certain persons and bodies will be obliged to supply information on residential properties to the Revenue Commissioners when required to do so, including providers of gas and electricity, An Post, the Minister for Social Protection, the Minister for Agriculture, Food and the Marine, and local authorities. The information from these bodies will assist in compiling the register of residential properties.

Part 16, comprising sections 154 to 156, contains provisions in regard to the household charge. The household charge will no longer be payable from 1 January 2013. Arrears paid before 30 April 2013 will be capped at €130. Amounts outstanding after 1 July 2013 will be increased to €200 and added to local property tax due on the property, to be collected by the Revenue Commissioners. This is an important assurance for people who paid the household charge that non-payment of the charge will not be ignored and that arrears will be collected by the Revenue Commissioners.

Part 17, covering sections 157 to 159, contains various supplementary provisions, including a provision for payment of local property tax by the Minister for Finance into the Local Government Fund from 2014.

I thank the officials of my Department and the Revenue Commissioners, who worked to produce this Bill. I also thank officials of the Department of Social Protection, the Department of Agriculture, Food and the Marine, the Department of the Environment, Community and Local Government, the Local Government Management Agency, the Property Registration Authority and other Government agencies, which have worked on matters relating to the introduction of the tax, both on the interdepartmental expert group and on the group chaired by Revenue to prepare for the introduction of the tax.

The key objective of the Government is to support the creation of jobs and this was evident in the supports that I included in last week's budget for SMEs and for the different sectors of our economy. The local property tax will broaden the tax base that funds our vital public services in a manner that does not directly impact on employment. The tax is also structured to adhere to the Government's other key objective to be fair and progressive - the wealthiest will pay the most.

It is unfortunate that so far in the budget debates the Opposition has failed to propose realistic positive measures that support job creation. The Opposition has resorted to opposing many of the key elements of the budget that are necessary to bring about the fiscal stability that is essential for long-term economic growth and job creation. Unfortunately, Opposition Members appear to be engaged in opposition for opposition's sake. Fianna Fáil is opposing a commitment it made in Government. Sinn Féin is opposing a tax that it uses for the funding of public services in Northern Ireland. The left-wing representatives here are opposing a tax that is at the very core of Marxist teaching - a tax on capital assets.

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