Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

The pyrite panel appointed by the Minister for the Environment, Community and Local Government recommended that consideration be given to providing an exemption from local property tax where damage from pyritic heave had been proven by testing. This was to be proven in accordance with a National Standards Authority of Ireland standard capable of determining if there was reactive pyrite in the sub-floor hardcore materials and if it had been subject to pyritic heave.

Irish Standard 398, titled "Reactive pyrite in sub-floor hardcore material - Part 1: Testing and categorisation protocol" was published on 29 January 2013 by the NSAI in response to the panel's recommendation. Accordingly, section 10A of the Finance (Local Property Tax) Act 2012, as amended, provides that an exemption from the charge to local property tax will apply for a temporary period of at least three consecutive years for residential properties that have been certified under the Finance (Local Property Tax) (Pyrite Exemption) Regulations 2013, SI 147 of 2013, made by the Minister for the Environment, Community and Local Government, as having significant pyritic damage.

The regulations set out the methodology for the assessment of dwellings to establish significant pyritic damage. These regulations require that homeowners demonstrate significant pyritic damage in accordance with the NSAI standard I.S. 398. To be eligible for an exemption from local property tax a liable person must have a damage condition rating of 2 or a damage condition rating of 1 with progression, established on foot of a building condition assessment, BCA, carried out by a competent person in accordance with the NSAI standard, and have a sub-floor hardcore material classified by the appropriate competent person or persons as susceptible to significant or limited expansion, established on foot of testing the sub-floor hardcore material.

The purpose of the building condition assessment is to demonstrate damage and to inform whether sampling and testing of the sub-floor hardcore of the residential property should be undertaken to confirm that such damage arises from pyrite. The building condition assessment does not involve any invasive internal or external inspections to a residential property and, on its own, cannot be used to state conclusively that reactive pyrite is present in the sub-floor hardcore of the property.

Grievances about the operation of the LPT exemption centre on the cost that must be incurred by a property owner in verifying that his or her property has been damaged by pyrite.

I made a commitment to examine the local property tax and any impacts on LPT liabilities as a result of property price movements. In this regard, Dr. Don Thornhill is conducting a review to consider and make recommendations in the context of property price developments on what adjustments, if any, might be made to the system to achieve relative stability of LPT payments by liable persons. Dr. Thornhill chaired the interdepartmental group on the design of a local property tax in 2012. The review will address a number of other issues concerning the LPT, including the relief from LPT for owners of pyrite-damaged homes and how the anomalous issue that has arisen in this regard can be resolved satisfactorily. I expect the review by Dr. Thornhill will be completed by summer 2015.

Resolution of the pyrite LPT relief issue may necessitate a change in the relevant provisions of the Finance (Local Property Tax) Act 2012, as amended, or the Finance (Local Property Tax) (Pyrite Exemption) Regulations. If it is the case that legislative change is required I will examine with the Revenue Commissioners the possibilities for applying any change on an administrative basis in advance of such legislative changes. I am mindful that the issue the Deputy has raised needs to be addressed and I am keen to reassure him and the homeowners affected that the situation is receiving attention.

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