Terence Flanagan (Dublin North East, Fine Gael) | Oireachtas source

I welcome the opportunity to contribute to the Finance (Local Property Tax)(Amendment) Bill 2013. I acknowledge the presence in the Chamber of the Minister for Finance, who has been here for the full debate, a point welcomed by Members. The Minister is here to listen and take on board the issues raised. As a previous speaker noted, the Government is introducing the local property tax because of a commitment in the troika deal entered into by the previous Fianna Fáil-led Government. This is an alternative to introducing increased income taxes, which would set back the employment situation.

This measure is seen to broaden the tax base and generate income of approximately €500 million each year. If there had been no property tax in the first place we may not be in the position we are in at present. New exemptions are included in the Bill and I am pleased that various concerns raised by Deputies in December have been taken on board by the Minister. In particular I welcome the amendment exempting those homes affected by pyrite damage. Qualifying homes will be eligible for a waiver for at least three years. When the Finance Bill was published after the budget in December it did not contain any specific reference to the property tax for homes with pyrite heave. I am satisfied that this matter has been addressed because there was considerable concern among homeowners with damaged homes. I have seen at first hand the negative impact of pyrite heave on homeowners. I agree that they should not be liable for the property tax.

The issue of pyrite in housing has brought a good deal of unnecessary stress and anxiety. It has put a good deal of pressure on families through no fault of their own. These people have made the largest investment of their lives and now find themselves in this particularly difficult situation. This is on top of the other difficulties facing homeowners, including negative equity and mortgage arrears.

Section 3 covers the exemption for a period of at least three years for homes with a significant level of pyrite-induced damage. Section 3 amends the principal Act with a new section 10A which stipulates that the Minister for the Environment, Community and Local Government, Deputy Hogan, will draw up the regulations for testing properties to establish the level of pyrite damage sustained and whether a house has been impacted by a significant level of pyrite damage. There is an unresolved issue in this regard, that is, the testing of the relevant homes and the costs involved in testing. The issue features in the pyrite report and the report suggested that a generic test should be introduced to keep costs low, but we need to ensure this takes place as soon as possible. People should get an opportunity to carry out testing and the tests should be cheap and efficient.

The pyrite panel has conducted a thorough review of the extent of the problem in Ireland. It is estimated that approximately 12,000 homes could be affected and possibly more. We will find out the full extent of the situation when people contact the Revenue Commissioners in the coming months regarding their particular circumstances. Up to 1,000 homes have already been fixed up and remediated but clearly there is a need for more progress to be made in this area. Further progress is needed to deal with the testing issue and the categorisation of homes. I hope such progress will be made quickly and efficiently in the coming months.

I am concerned by reports that insurance companies are discriminating against homeowners who have had their homes remediated, a point raised by my colleague, Deputy Alan Farrell. He has a considerable interest in this area. Insurance companies should not discriminate against homes where pyrite has been removed. I am aware that the Minister for Finance has no role in this specific area but I sincerely hope that the Financial Services Ombudsman will investigate this issue and ensure that homeowners are not presented with further obstacles once their homes have been repaired.

With regard to collecting the local property tax, it is imperative that clear auditing systems are developed to ensure money collected from an area is ring-fenced for the relevant local authority to be spent on improving local services and amenities for those who pay their taxes locally. In my constituency, I am concerned that Fingal County Council does not have sufficient funds to undertake essential footpath and road repairs or tree maintenance in the part of the constituency for which it is responsible. I understand the concerns expressed by constituents who have paid the household charge when this work is turned down by the local authority. Some of them have stated that they want to see the benefit of the property tax in their own areas. If we are to get people's buy in, they must be able to see the local property tax making a difference on the ground.

It is currently unclear how much tax revenue will go directly to the local authority in the area where it is collected and how much will be distributed through the local government fund. Perhaps the Minister will address that question when he makes his concluding remarks. More than anywhere else, residents in Dublin are concerned about this issue because they are paying the most in property tax and it is only right that taxes paid on Dublin properties should remain in Dublin to improve the communities which pay them.

Local authorities will have the power to increase or decrease the level of property levied in their respective areas by up to 15%. It is important that councillors have these powers if local government is to be relevant. Local authorities wishing to adjust the rate will have to provide estimates of their income and expenditure for the period in question, as well as their financial position and a projection of the financial effect of the change. Accountability will be enhanced if councils are asked to provide annual statements to the relevant Department on how the local property tax is spent.

I welcome the deferral put in place for those who administer a deceased person's estate. This issue was raised with me by a constituent who was charged with selling a house as an executor of a will. The person was in the difficult position of being required to pay the household charge and the non-principal private residence charge up-front. The Bill provides the option of a deferral of up to three years to allow for the administration of an estate without causing unnecessary tax flow problems for the executor. I also welcome that individuals who enter into insolvency arrangements will be given the option of a deferral. People who may face excessive hardship in paying the property tax will also be able to defer payment. The exemption for incapacitated individuals and voluntary and charitable organisations with a low income base is also welcome. Local authority tenants are being levied because the more people involved in paying this tax, the smaller the burden on those who pay it. One of the criticisms of the household charge was that local authority homes were not included. New homes purchased in the next four years will be exempt, however. I welcome the Bill.

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