Pearse Doherty (Donegal South West, Sinn Fein) | Oireachtas source

Its only objection is that it is not in government to do it. Sinn Féin has no issue whatsoever with taxing wealth - property is a part of wealth - but we are completely opposed to taxing the family home, regardless of income or wealth. If we want to have a wealth tax, let us tax the yachts, helicopters and investments of the wealthy and set a threshold for an exemption up to a certain point. That would be a real wealth tax. Let us not pretend that what we are discussing is a type of wealth tax. Some of Europe's most progressive countries, including Sweden and Norway, operate a wealth tax regime that works. At least Fianna Fáil was in favour of this type of tax regime before the election, but the Minister and the Government were not and neither was the Labour Party. Why has it capitulated to the failed policies of the past?

As I was browsing the Internet last night, I came across a leaflet which had been issued by the Minister's party in 1994. It published the leaflet in January 1994 and the Minister was the party's finance spokesperson in the preceding year. The anti-property tax leaflet was entitled, They Will Tax the Roof over Your Head, and much of its content is relevant today. One heading asks, "Why is Fine Gael so Opposed to this Family Home Tax?" Fine Gael did not call it a property tax, for which Fianna Fáil was arguing at the time, but a family home tax because it knew that was what it was and it was right. The answer was: "It is anti-family because it is based on the total income of the family". It added that it could encourage mothers and fathers to send their sons and daughters out of the family home. I am not sure about that, but that was Fine Gael's first bullet point. The next described it as "an anti-Dublin tax. Because of higher land values in Dublin, the majority of those liable for the family home tax will be in Dublin". That is very similar to the situation today. it continued: "It is a double taxation on people who have already paid their full tax liabilities in PRSI and PAYE". The situation today is the exact same and the only difference is that people have paid massive sums in stamp duty also. It was described as "anti-home ownership. The Family Home Tax ... will discourage people from buying their own homes". The same applies today. It continued: "It is against the spirit of self-reliance which Fine Gael encourages". Obviously, the party has ditched this, but it went on to state, "It's Just not Fair". I have the leaflet in front of me. This is based on Fianna Fáil's and the Labour Party's attempt to bring in the charge in and the leaflet asks, "Could you trust either Labour or Fianna Fáil again? They have broken their promises and do not deserve your trust. So much for their much-vaunted commitment to 'change'!" That is what the Minister's party campaigned on. Every single one of those policies are the same as those included in the Bill. It also stated: "The Residential Property Tax will not help to relieve the burden of taxation on income. The additional Family Home Tax will not create one extra job and makes no contribution whatever to tax reform. Fine Gael will be opposing the imposition of the Family Home Tax by every means possible". It finishes with the line, "Don't let them get away with it! Join Fine Gael".

Every one of those points is relevant today. They are probably more relevant today than in 1994, given that we are in the middle of a massive crisis in terms of mortgage distress. Everyone in this House knows that people in high places connived with banking officials to assist individuals to buy homes that they should never have been allowed to buy. They broke, bent and distorted the rules in such a way that mortgages were given to individuals who should never have had them, yet they are sitting back comfortably and the individual with the loan is taking all of the responsibility.

I recognise that the Bill which amends the original Act brings forward some reliefs, in the narrowest sense of the word. There is a lesson to be learned. The Minister rushed through the last Bill with hardly any debate. There was only one division on an amendment - mine. The rest tabled by us, Fianna Fáil and Independent Members were not even reached and debated. Now we have an amending Bill even before the original Act is in operation. Next Tuesday will see a repeat of the earlier debate and some of the topics we will discuss are proposals we have been articulating, or that I, in particular, articulated, during the last debate but which the Minister dismissed and rubbished because he wanted to get the Bill through as quickly as possible.

Although there are some reliefs, in essence, the family home tax is unfair. It contains only the tiniest elements of the concept that one should pay according to one's ability to pay and in these areas it is just a case of deferring the payments for several years. There are gaping inadequacies in the Bill which is nowhere near satisfying the criteria for fairness. Where are the breaks for those who have paid stamp duty? The programme for Government committed to taking on board the needs of those in mortgage distress when proposing a site value tax. The Minister is not telling me that the amendment in respect of personal insolvency deals with that matter. That is a complete and utter farce. Those who have paid massive amounts of stamp duty should not be liable for this family home tax. I will table an amendment on Committee Stage to propose that the outstanding liability on a mortgage be taken into account when calculating the chargeable value and that that portion be exempt also for those who have paid stamp duty. For properties bought after 2000 stamp duty should be taken into account. Likewise in the case of those in negative equity.

These would be small steps which would prevent many already burdened and unsustainable mortgages from sinking completely under this new tax. The Minister's amendments show that his only interest is in recouping the maximum amount for the coffers, regardless of the impact on society and families. Despite our complete opposition to the Bill, we will not just walk away from it. We will table constructive amendments to try to shape it in order that it will be less destructive and more economically and socially fair. We would exempt local authority housing, not for profit housing bodies and households with restructured mortgages in arrears. We would exclude those living solely on State support, including social welfare and State pension payments.

It is welcome that the Minister has begun to address the issue of pyrite homes. Section 3 allows for a three year break in the case of homes damaged by pyrite. With others, I proposed such a break during the process of legislating for this tax. It shows the arrogance of the Government that it refused to incorporate it, but it has now backtracked. Questions remain, however, about this exemption. I understand regulations to exempt these homes will not be ready by the time Revenue issues the letters which will start to go out in the next ten days. Residents will receive these bills but will not know what the regulations will entail and will be left in limbo for some time. It is bad practice when there is a burning issue such as pyrite homes that the Minister can put through legislation to enable exemptions, yet we are asked to support it on blind faith. The devil is always in the detail. It is also the case that those whose homes are affected by pyrite, a serious issue, who decide to repair them by underpinning which costs a substantial sum will not be exempt. A person whose house is damaged by pyrite who spends tens of thousands of euro of his or her income to make it fit for purpose will not be eligible for the exemption under this clause, which is both serious and unfair.

This issue needs to be rectified by the Minister before the Bill is enacted to ensure it is not allowed to fester.

I welcome the exemption for properties used by charities. However, there is still some detail that we will need to tease out on Committee Stage.

Section 6 allows for relief on renovations made by disabled residents. This is a provision I brought forward on Committee Stage last year when the original legislation was going through. However, it was dismissed at the time. This is not the way to do politics. If a good and sensible proposal is made by the Opposition, it should at least be considered by the Government. I acknowledge that the Minister is considering it now, but at the time he should have said this was a sensible proposal and examined it. While it is welcome that this provision has been included in this amending legislation, I have serious concerns about what the Minister has done with it because he has not gone far enough.

The exemption is linked with homes which were adapted for a disabled resident and received a housing adaptation grant for people with a disability or a disabled person's grant and an essential repairs grant. The problem is that as these grants are means-tested, certain individuals did not receive them. For example, a mother and father may have worked in a bank and the construction industry, respectively. Their son or daughter may have had a serious accident and, subsequently, they were required to adapt their house. This may have involved building on an additional room or a bathroom, or modifications to allow for wheelchair accessibility. Depending on the age of the son or daughter, they may have wanted to live independently and the alterations may have required a separate kitchen to be added on to the house. All of this would have cost a substantial amount of money. However, as the parents were working at time, they were not eligible for the grants. Today, because of the downturn in their respective sectors, they may be both unemployed, but they are still not entitled to a deferral. The value of the adaptions which may have come to €50,000 in order that their child could be accommodated in their home will be taken into consideration in the chargeable value of their house for the purposes of this tax as a deferral is based on someone having a grant. Even for those who did receive a grant, it must be remembered that it is based on a tiered structure. Accordingly, it depended on one's income, even if one was under the threshold, and one might just have received a portion of the grant. For example, the adaptions may have cost €50,000, but a person only received a maximum grant of €12,000. Under this section, the chargeable value that can be deducted from the value of the house is €12,000, despite the fact that more was required to fund the alterations.

What about a case where the mother and father have separated? Of course, the father would have had to adapt his home to allow access for the child, but it will not be included under this exemption because it applies only to the house in which the child permanently resides. There are also issues concerning local authority housing being included in this tax, which we oppose.

The Minister has made an unpopular tax even more unpopular. The snitch clause is unacceptable. It is not right that he is asking citizens to inform on their neighbours. That is what Revenue is there for. Let citizens comply with this tax, if they so wish. It will be the law of the State and for them to comply with it. When they buy a property, they will have to include its value. It should be up to Revenue to calculate if someone has underdeclared. It is not right to impose legally a penalty if people do not snitch on their neighbours.

The deferral of payments is nothing more than a sop. There are two categories who cannot afford to pay this charge. Those whom the Minister has recognised as not being able to pay will be given a prize of a 4% interest rate. The second group who cannot afford to pay because they will opt to pay the mortgage first, which has not been recognised by the Minister, will be penalised by the imposition of an 8% interest charge. Recently, a couple who are both gardaí told me of the impact Croke Park nua would have on them. They live in Dublin, have a large mortgage, pay huge management fees on their house, but they are getting by and able to pay their mortgage. The new Croke Park deal is going to hit them hard, but they still believe they will be able to get by. They have a young child less than one year old, but they cannot afford child care. If they were to pay for child care when they were working, they would not be able to pay the mortgage and be in arrears. Therefore,, they work back to back. One comes off shift and hands the baby to the other while the other goes back on shift. That is what is happening for some of the families that are just getting by. The Minister does not recognise them and believes they are still able to pay this tax. They are prioritising everything else above defaulting on their loans. The majority will want to abide by the law and pay this tax. However, there will be those who will not be able to do so and whom the Minister will force into non-compliance with Revenue. Allowing Revenue to dip into their bank accounts and social welfare payments is completely unacceptable. Sinn Féin will be bringing forward a Bill to repeal this legislation. Even at this late stage, will the Minister reconsider to come up with a fairer way of creating this revenue stream for the State to reduce the deficit and not impose this hardship on families across the State?

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