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

I thank Deputy Ellis for raising this issue. The introduction of the LPT formed part of a broader approach to the taxation of property that aims to replace some of the revenues from transaction-based taxes, which proved to be an unstable source of Government revenue, with an annual recurring property tax, which international experience had shown to be a stable source of funding. Stability needs to be at the core of our public finances now and in the years ahead. LPT enables us to achieve the goal of stability in a way that does not directly impact on employment. From the start of its term, the Government has been unwavering in its determination to do everything in its power to protect and support the creation of jobs. Job creation has been the Government's top priority. The LPT, which is a tax on assets rather than employment, will not adversely affect job creation.

The Government decided that the LPT should be centred on the principles of equity, transparency and simplicity and that a universal liability should apply to all owners of residential property with a limited number of exceptions. Limiting the exceptions available allows the rate to be kept to a minimum for those liable persons who do not qualify for an exemption. Deputies will appreciate that reliefs and exemptions have costs that must be paid for and their introduction must be considered only where there is a clear economic and social policy that needs to be addressed. Even with the limited number of exemptions available under the legislation, I understand that exemptions were claimed in respect of some 42,000 properties for the 2014 LPT. The Finance (Local Property Tax) Act 2012, as amended, provides that any property that is in use as, or that is suitable for use as, a dwelling house is subject to LPT.

The current valuation period is 1 May 2013 until 31 October 2019. The period was recently extended from 31 October 2016 on foot of legislative amendment via the Finance (Local Property Tax) (Amendment) Act 2015. This amendment was introduced to give property owners certainty in regard to valuations and to remove concerns that LPT liabilities could rise significantly, particularly in urban areas, as the property market recovered.

The 1 May 2013 declared valuation of any residential property is not affected by subsequent repairs or improvements made to a property or by any increase or decrease in property prices that might occur over the course of the valuation period. The LPT due for any residential property is based on the market value at 1 May 2013. Where structural defects are detected two years later, as happened in the Longboat Quay complex, they may affect the current valuation of the properties. However, they do not change the valuation retrospectively. Therefore, there is no basis in law to reduce the valuation during the LPT valuation period.

I understand that, due to the error to which the Deputy referred, a small number of property owners in the Longboat Quay complex received letters from Revenue indicating that a reduction in valuation was possible. On discovering the error, Revenue immediately wrote to the persons involved apologising for the incorrect information.

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