Seán Kyne (Galway West, Fine Gael) | Oireachtas source

It is safe to say that most countries have some form of local property tax or charge and it is an internationally accepted way of funding local service provision. A local property tax is a steady source of income for local authorities. As former members of local authorities, I and many Deputies know that we had very little power in terms of raising local revenue.

Other than setting commercial rates and, in recent years, water charges for farmers and businesses, we relied on the local government fund and grants. Motor taxes went to the Central Fund. The report on the commission on taxation recommended that at least 86% of total expenditure at local level should be raised locally. It is accepted that it was a mistake to increase income tax in the 1980s because it became a tax on jobs and investment. A local tax, as long as it is progressive and ensures those with the most expensive properties pay most, is the fairest system.

The context for this debate is the EU-IMF programme, which includes the introduction of a property tax. It is a requirement of the programme that we widen our tax collection sources. Furthermore, we are overspending as a country and the gap between revenue and expenditure has to be narrowed, with €1.5 billion more required per month. We have to look for alternative methods of raising money. Fianna Fáil negotiated and accepted the property tax as part of the troika deal.

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