Simon Harris (Wicklow, Fine Gael) | Oireachtas source

I know Deputy Daly appreciates Deputy Lawlor’s interest in this and it is an issue he has raised. I accept Deputy Daly’s bona fides on this issue which she has been pursuing for some time. The Minister for Finance and I are very aware of the issues she is trying to address with her proposed amendments. I acknowledge the stressful situations that individuals face when issues arise post-completion or when building works are not completed to the required acceptable standard. This is particularly difficult when issues manifest in people’s homes that they have worked hard to purchase and maintain which, when not resolved, impact greatly on the lives of those affected.

This amendment seeks to exempt properties from local property tax, LPT, where the property has a BCA which establishes a damage condition rating of above 0. I am advised by the Department of the Environment, Community and Local Government that the damage condition rating is classified as follows: 0, none, which means no damage or aesthetic damage only, identified that could be attributable to pyrite-induced heave; 1, minor, meaning some damage that could be attributable to pyrite-induced heave or other causes; and 2, significant, meaning significant damage identified that is consistent with pyrite-induced heave. A property must have a damage rating of 2 to be included in the pyrite remediation scheme provided that the Pyrite Resolution Board is satisfied that the damage has been caused by pyrite.

The BCA to which the Deputy refers is the first stage in the process of identifying and assessing the presence of pyrite in the hard core infill material underneath the building and whether it has caused or is likely to cause structural damage to the building. This assessment must be carried out by a suitably qualified person such as an engineer. It is a non-invasive assessment based on an internal and external visual inspection of a building which aims to determine the presence or absence of apparent damage that is consistent with pyritic heave and to quantify the extent of such damage. It is not, however, capable of establishing that the presence of pyrite is the cause of the damage. This is our fundamental problem with the Deputy’s proposal. The damage could be due to other causes such as subsidence or substandard building work. Actual pyrite damage can be established only by analysing a sample of the hard core material in a laboratory to determine its susceptibility to expansion as a result of various chemical reactions. The BCA assesses the extent of the damage and this damage condition rating determines the requirements for sampling and laboratory testing by a geologist and for reinspection to establish whether damage is progressing. At the end of the process a certificate is completed by an engineer stating the category assigned to the building. It is this certificate that must be submitted to Revenue when claiming the exemption, and that will continue to be required in making a claim for the LPT exemption.

On foot of the report and review of LPT, however, which the Minister commissioned and which was submitted to him by Dr. Don Thornhill, the Minister has decided to extend the exemption to some additional categories of properties that have been badly damaged by pyrite but have not obtained the required certification of damage. These are properties that have been accepted for the remediation scheme where the Pyrite Resolution Board is satisfied that laboratory testing is not necessary to establish the damage is caused by pyrite. The exemption will also be available for properties that have been remediated, either as a result of a successful claim for structural damage under an insurance policy or by the builder who built the property. Alternatively, either of these parties could have compensated the property owner with sufficient funds to remediate the property.

Dr. Thornhill considered it important to emphasise the self-assessment nature of the valuation of a property for LPT purposes. It is a matter for the property owner in the first instance to calculate the tax due based on his or her assessment of the market value of the property. Issues such as structural damage to the property and the established presence of pyrite in a particular area would be a relevant factor to be taken into account when self-assessing the value. It was made clear during the passage of the Finance (Local Property Tax) (Amendment) Act 2013 that the exemption being provided at the time for homes affected by pyrite would be restricted to properties with significant pyritic damage and that not all damaged properties could avail of the exemption. The Minister believes the Deputy’s proposal is far too broad. It seeks to exempt properties which have a damage rating of minor which, while it could be attributable to pyrite-induced heave, could also be attributable to other causes. The Minister is not prepared to go beyond the measures recommended by Dr. Thornhill in his report.

In line with the extension of the valuation date to 1 November 2019, the period for which exemptions apply, including that for pyrite, is also extended by an additional three years. Furthermore, depending on when in the period an exemption first applies a pyrite-damaged property could be exempt for up to eight years.

This could provide significant additional relief to people in the most affected categories.

As the Minister has advised in exchanges the Deputy has had with him on many occasions, a liability to LPT should apply to all owners of residential properties, with a limited number of exemptions. Limiting the exemptions available allows the rate to be kept low for those liable persons who do not qualify for an exemption and ensures the tax base is as broad as possible. There is a cost to any tax exemption and keeping exemptions as targeted as possible minimises the need for other taxpayers to pay higher rates or for the Government to reduce investment in public services.

On amendment No. 7, Revenue will seek only relevant details. Not all the items specified on the list will be relevant for each property and not all will be automatically requested. However, it is likely that items other than the address will be relevant in particular circumstances. Therefore, I am not prepared to accept the amendment. The Revenue has advised the Minister for Finance that it will take a reasonable approach when seeking information to establish the exemption. The exemption, where merited, should be provided with as little hassle as possible to the home owner and the Revenue will seek only the information it needs and deems relevant to make the determination.

See this speech in context