Maureen O'Sullivan (Dublin Central, Independent) | Oireachtas source

Ireland is one of the few countries in the western world which does not have a property tax. There are examples of international best practice of fair ways of assessing and collecting property tax, how best to use it to provide essential local services and how to allow for exemptions and waivers. While everyone was delighted when the old local authority rates were abolished, there is no doubt that it was a regressive step. Abolishing rates was an election promise which was shackled to party-political whims for decades regarding local services. There is no doubt that this contributed to the speculators' property boom and planning corruption which has led us into austerity.

The problem with the property tax is that it is being introduced at the worst time in our history, during a recession when there are so many burdens on struggling families. Many reputable organisations made alternative suggestions to this tax, including the Commission on Taxation's proposal for a site value tax. Market value is problematic owing to mortgage costs being higher than the value of a home. A site value tax could have been considered to provide for more efficient use of land as well as to raise revenue. It might also have played a role in ensuring we did not have another property boom followed by a bust.

A site value tax would have been a better and fairer way of assessing value.

Any measure of taxation should be based on ability to pay. The unfortunate fact is that we have the highest number of non-working households - that is, households without a working adult. We also have the highest level of household debt in the OECD. One in five mortgages is in distress and some organisations tell us that more than half of all adults have less than €100 in disposable income per month. The phrase "like taking blood from a stone" comes to mind.

Let us consider how this tax is supposedly fair. Supposedly, those who own the most valuable properties will pay most. This aspect is being lauded as one of the measures that will hurt the wealthy. However, it is reckoned that only 1% will be liable for the so-called mansion tax. Those in urban areas will pay significantly more for their houses than those with similar houses in rural areas. Older people with small pensions may be marginally above the income threshold of €15,000, which, I believe, is far too low. It is welcome that there is an exemption for people who, for reasons of old age, physical or mental disability or other causes require special accommodation. I believe the exemption should cover local authority housing tenants and tenants in the non-profit social housing sector. Housing associations are exempt in European countries and such bodies and local authorities should be exempt, as recommended in the Thornhill report, because they are in involved with people in low-income families.

In fairness, Dublin City Council has been keeping within budget, but this tax will undermine that. The council cannot impose it on its tenants, who are already struggling to pay their rent and trying to cope with other cuts, including child benefit; the privatisation of waste collection in Dublin Central has also resulted in increased charges, as predicted. Some tenants will come under the special exemption but for other tenants on similar incomes it will not be enough. There are extensive housing needs in Dublin Central. The housing associations are doing tremendous work but imposing this tax on them means certain projects might not go ahead. Clúid Housing Association has striking new plans in Cabra for senior citizens' housing but that might stop and it could affect the budget for maintenance of properties as well.

How can the Government expect people in homes affected by pyrite to pay this tax? Their homes are structurally defective and one cannot get a mortgage to buy a house with pyrite. These people who have already paid stamp duty are expected to pay a property tax as well. I notice that the budget for homeless services will be maintained at 2012 rates. However, the homeless services in Dublin maintain they have increasing demands. They cannot do the same amount of work for more people on the same money as last year.

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