Eoin Ó Broin (Dublin Mid West, Sinn Fein) | Oireachtas source

I will be sharing with Deputy Ellis.

As Deputies are aware, Sinn Féin is opposed to the LPT. When one considers the LPT, one realises that it is probably one of the worst or most poorly designed taxes in the history of the State. It is a tax not only on assets but also on debts. Anybody who was or who continues to be in negative equity is still charged the same as if he or she were sitting on an asset. It results in a charge on people who are asset rich but income poor, particularly older people in rural areas who may have properties with higher values but who simply do not have the income to pay the tax. The LPT also leads to those who are unable to pay being penalised. The Minister of State conveniently forgot to mention that there is a 4% annual interest charge on deferrals and that this accumulates year on year. That seems to be a particularly callous way to allow people to defer paying the tax.

Crucially, contrary to what was claimed when the LPT was introduced, no additional money has been given to local authorities. Those of us who were local authority members at the time saw that - euro for euro - as grants for roads and housing were taken away, they were replaced by the local property tax. During that period, a number of key services, such as those relating to water and waste management, were removed from local authorities. Not only are people paying more, they are paying more for fewer services. One of the reasons we will be enthusiastically supporting the Bill is because people in multi-unit developments are paying on the double.

The Minister of State's comments on how people who pay management charges are paying for other things that regular homeowners have to pay for out of their own pockets are wrong. Some of the insurance costs incurred by people in multi-unit developments do not exist in the context of standard, stand-alone houses. The average cost of management charges, in Dublin and the commuter belt in particular, is three or four times the average local property tax charge. While management charges sometimes include collection of waste, for example, those things are included in addition to the costs to which Deputy Darragh O'Brien rightly referred.

Our view is that the LPT should be scrapped. We have argued strongly that it should be phased out over three years. The cost of doing so would be €155 million annually. I am sure the Minister of State will be delighted to know that we have set out, by means of parliamentary questions, exactly from where that revenue could obtained. We could, for example, start to fairly tax excessively high earners and impose the right tax credits on incomes over €100,000. This would yield something in the region of €185 million a year. A 5% income levy could be introduced on incomes over €140,000, which would yield €310 million a year. We could, as is the case in many other successful European economies, impose a wealth tax on net assets in excess of €1 million. Deputy Noonan stated in the House some years ago that such a tax could yield in excess of €500 million a year. When one has a bad tax, one does not keep it; one scraps and replaces it with something better. That is what Sinn Féin will continue to propose.

As to the Bill , which is good and which Sinn Féin is happy to support, we are talking about hundreds of thousands of occupants of multi-unit developments, many of whom are, in addition to the LPT, paying between €1,000 and, in some parts of Dublin, €2,000 annually in management fees. Many of these are people struggling to pay mortgages. They are also struggling to meet the rising cost of living, childcare and healthcare costs, etc. This is simply an additional burden which they have to unfairly bear.

It is important to understand for what these people are paying. When a person pays his or her management fee, it covers, for example, the maintenance of open space, which includes the cutting of grass and things that the council would ordinarily do in residential council estates and private estates. It also covers street lighting and repairs to paths and roads, which, again, would ordinarily be dealt with by the local authorities in standard urban housing estates, public or private. On that basis, it is legitimate to state that there is an element of double charging here. People who are paying management fees and the LPT are paying for services which they do not get because the council does not provide such services in large multi-unit developments. In some of the mixed developments, householders are paying lower management fees and the LPT, which is equally unfair. The provision in the Bill to the effect that it will apply only to principal private residences is very sensible. Landlords obviously generate income for themselves and they can pay the LPT from that.

I echo Deputy Darragh O'Brien's point in stating that many of the people who are paying this charge are struggling in other ways. The issue with latent defects is a case in point. We are seeing a significant increase in the number of homeowners who, through no fault of their own, are in properties with latent defects - whether they relate to fire safety, water ingress or whatever - that are going to cost them somewhere between €10,000 and €40,000 to rectify. While the Government continues to state that this is really a matter for the home purchaser and the seller, those latent defects were only possible as a result of a regulatory regime which, essentially, involved self-regulation and which this House approved and stood over for far too many years. The Government has a level of responsibility and culpability in that regard. The fact that it continues to bury its head in the sand and refuses to provide some level of support in respect of those properties with latent defects is deeply regrettable.

As Deputy Darragh O'Brien and I have pointed out at meetings of the Joint Committee on Housing, Planning and Local Government, there is a need for a fundamental review of the way in which the management companies of multi-unit developments operate. The Apartment Owners Network, a fantastic voluntary network of apartment owners, has made multiple submissions to the Government and joint committee in which it has urged the former to examine how those companies can be better equipped and supported to do the job bestowed upon them under the Multi-Unit Developments Act 2011. It is not all about money. Some of what the network is seeking involves support. It wants training, professionalisation and assistance in terms of ensuring that when its members are on management companies, they will be able to deal with the complexities of governance and management. Such supports could easily be facilitated by the Government. The network also wants assistance in the context of accessing finance. It is not looking handouts. Rather, it wants low-interest finance to be provided through Home Building Finance Ireland in order to fund remedial works or to assist in the provision of sinking funds. Obviously, they go beyond the scope of the Bill but it is right to raise these broader issues.

Small and all as the measure provided for in this legislation is, it would send out a clear signal that the Government actually recognises that people in multi-unit developments need assistance and that a small bit of financial support would be the right way to start.

There is nothing in what the Minister of State said that stands up to any sort of credible scrutiny. That is why Sinn Féin will be happy to support the Bill. We will be supporting Deputy Darragh O'Brien in ensuring that the Bill passes all Stages as quickly as possible in order that we might give struggling homeowners a bit of a hand up.

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