Eoghan Murphy (Dublin South East, Fine Gael) | Oireachtas source

While I understand the property tax has been designed in this way because it is, perhaps, the most efficient and effective way to collect it, I regret that I do not agree with it. Looking at it from a perspective that would be different from that of the Revenue Commissioners and from the point of view of reform of local government, the introduction of local service charges for households, thus shifting some of the burden from local businesses in bridging the democratic deficit at the local level, and from an urban perspective, I would not have designed the tax in this way. I admit, however, that I have not been able to design a property tax that would meet all of the necessary requirements. In that regard, I note the proposals brought forward by the Dublin Chamber of Commerce, in particular its idea of banding rural and urban properties together.

No one likes paying taxes. However, they are an essential element of the social contract. It is important to recognise some truths in this matter, even though they might not fit with the agenda that some in public life are trying to promote. In this economy those who earn more pay more, which is how it should be. We have a larger social transfer of wealth in this country than in any other European country, from the higher to the lower paid. This is achieved through the income tax system. We should not now be providing for a fiscal transfer from urban areas to rural areas by way of a national property tax as this undermines what is already being achieved through the payment of income taxes. Also, it poses a danger to social cohesion and is unfair.

While we want property prices in general to rise in order that some of those in negative equity can be lifted out of it, we do not want a return to the mentality of the past, when booming property prices were seen as a sign of progress and the property market was taken as an indicator of economic and general prosperity. There is a risk that levying this tax on the perceived market value of a property may do this. There is a further risk in relying on a tax designed in this way as a stable source of revenue, as we did in the boom years because it will be pro-cyclical and, in a recession, will lead to an impact in terms of declining government revenues, as happened recently.

On the particulars of the tax, we should attempt in some way to take into account those who in recent years paid stamp duty. This would only be fair, given the significant amounts paid.

On the concept of a mansions tax, this additional levy is not justified, as it is not based on the size of the property or its state of repair. It is notional and a penalty for which there is no real economic justification. It is grossly unfair to people living in Dublin who may be paying much more than those living outside the capital on a far smaller property. This also applies to the lower levy, not just the mansions tax.

On deferrals and exemptions, more work needs to be done in this regard. I support Deputy Anthony Lawlor's amendment on the executors of wills. As for occupiers, I they, not only the owner, should bear part of the burden.

I have corresponded with the Minister on this issue on a number of occasions this year. He knows where I stand on the matter. While I will support him in his decision on this matter, I will continue to work constructively to try to address some of my concerns with the current design before the tax is introduced. When it is implemented, we should move immediately to reform it to have a proper local services charge, to be raised locally and administered by the local authorities, one which would reflect the real costs of providing servicesfor the people who use them.

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