Regina Doherty (Meath East, Fine Gael) | Oireachtas source

I am grateful for the opportunity to speak on the Bill. I acknowledge to the Minister of State that for me the Bill has highlighted the benefits of the listening process and I am grateful for this, particularly with regard to homeowners affected by pyrite. The Bill proves the Minister listened as he will provide exemptions for charitable bodies which provide properties for recreational purposes and for the properties of incapacitated persons which have been adapted for mobility reasons. These and a myriad of other exceptions will be made. I have great respect for the Minister for engaging in a listening process. However, I also have big concerns for the thousands of people who paid huge amounts in stamp duty on their properties in the past ten years.

It would be remiss of me not to represent those in my constituency of Meath East, some of whom paid the highest stamp duty values because they happen to live in the commuter belt. Most of those people have young families and are now in negative equity. Unfortunately, they were overlooked by the expert group and subsequently were not recognised for the inordinate amounts of stamp duty they had paid in the recent past.

Stamp duty was undoubtedly the poster boy of the tax boom for the last days of the Celtic tiger. Of course, all taxes rose during the boom but the rise in stamp duty was completely disproportionate. By 2006, stamp duty had risen by nearly 1,300% from its 1993 level, while other tax revenues had only increased by 400%. Stamp duty comprised 3% of total tax revenue in the mid-1990s but it reached almost 8% by 2006. For a time, Ireland appeared to have achieved the impossible by remaining a low-tax economy, while spending ever greater amounts on public services. It was all a mirage, however.

A couple who bought a house during the property bubble would typically have paid about €15,000 in stamp duty on a €300,000 home. That home has probably halved in value now. Even the expert group admitted that many people have ended up with bigger debts that they should have because they were forced to add the cost of stamp duty to their mortgages.

The Thornhill report argued that giving a break to those who paid stamp duty would be a boost to some people on high incomes, and that some of the cost of stamp duty was absorbed by sellers of properties during the boom. However, we all know that the majority of people who bought during the boom have stayed put and have no choice but to do so. They did not buy the house as a property - it was not speculation - they bought it as their home. There have been large reductions in household net assets with an uneven impact of cuts across different households. They have been particularly acutely felt by those experiencing unemployment and mortgage distress. There are compelling requirements to deleverage debt.

I would like to have seen the expert group come up with options within the legislation for this huge number of people. The Government has opted to charge a higher rate of property tax than the rate considered by the Thornhill expert group. Successive previous governments had become hooked on the notion of using once-off tax receipts, such as stamp duty in the property boom, to put in place programmes that required annual spending in good times and in bad. Do we not owe these people something?

Stamp duty from residential property brought approximately €1 billion into the Exchequer during the so-called tiger years. It peaked at €1.3 billion in 2006. There must be some recognition of that in whatever system we arrive at, given the extraordinary and extortionate stamp duty that was paid into the State coffers during those days. This matter is further complicated because buyers of new houses who did not pay stamp duty did, however, pay large VAT bills.

From 2008, despite broad agreement then that, as the bubble burst, a property tax was inevitable, political cowardice meant that civil servants in the Department were not tasked with drafting proposals for its implementation. No research was undertaken into what kind of property charge would be most equitable. Instead, there was an Irish solution to an Irish problem - namely, no solution but a loud consensus on the cause of the problem. Meanwhile, revenue accruing to the government from the property market via stamp duty, VAT and capital taxes plummeted by €8 billion in just four years, that is, from €10 billion in 2006 to €2 billion in 2010. Clearly, there was a crisis but instead of making a brave, bold move to do something about it by introducing the long overdue sustainable revenue raising that was required to fill the void, the last Fianna Fáil government was content to budget on a wing and a prayer, while slashing spending.

The scale of the task facing this Government should not be underestimated. Just because something is hard to do, however, does not mean it is not worthwhile. I respectfully ask the Minister to reconsider the thousands of homeowners who paid vast sums in stamp duty. I appreciate that we do not have a magic calculator like Sinn Féin does, but I respectfully ask the Minister to reconsider this matter and try to do something for those people in this Bill.

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