Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance) | Oireachtas source

The view of People Before Profit, as the Minister knows well, is that the property tax is an unjust, regressive and unfair tax on the family homes of large numbers of working people who have struggled to purchase a home and then have this tax imposed on them. This tax takes no account whatever of their income and their ability to pay.

When it was introduced, and contrary to some of the comments made by the Minister about the rationale for the tax, we were told that imposing this tax on the family home would lead to more funding for local government and it would also do something to dampen the property market. It was a response, if you like, to the madness of the Celtic tiger. That was the rationale put forward at the time to justify the tax. The broadening of the tax base might have been mentioned as well but the two central arguments put forward was that it would lead to more money for local government, leading to better local services, and it would do something to dampen the madness of the property market. The fact is that it has done neither of these. There has not been an extra cent for local services or government as a result of the tax because it replaced central government grants. In many cases, services have declined significantly in key areas. It is self-evident that this did absolutely nothing to dampen property prices and the craziness of the property market we saw during 2006, 2007 and 2008, which led to the crash. We are seeing it again now, with property prices rocketing once more.

There is a reason the Government deferred the revaluations and is trying to put some measures in this Bill to try to limit the unfairness that would result from a revaluation in line with the original flawed and unfair tax. It must adjust it because otherwise the Government would face massive political anger arising from any change in line with the original tax. It is an acknowledgement of all the points we have made from the outset that this is a fundamentally unfair tax. Although the Government has now taken measures to try to ameliorate its unfairness, fundamentally, that unfairness remains and will continue as long as there are revaluations every four years and resulting property tax increases.

I will briefly restate the reasons this is a fundamentally unfair tax. As was stated earlier, this is in many cases a tax on a debt, as a person may be paying a huge mortgage. It is a tax that is charged at different levels based on where a person happens to live, regardless of the fact that people's incomes may be the same as those in other areas being asked to pay less. It is a fundamental unfairness that is not addressed in this Bill and the point has never really been acknowledged or addressed by the Government. It is an unfairness we have always alleged about this tax.

I would be interested to hear the Minister respond to the following point. An additional injustice was uncovered in an email I received a while ago to our office. It relates to the interest charged for deferrals, and I note the deferral threshold has been increased to €18,000 from €15,000. I did not fully comprehend it until now. If the deferral is based on an income of less than €15,000, it means we will impose interest on people who cannot pay because they are too poor. A person will be punished by having interest imposed in respect of the deferral that will have to be paid at some time. I had not realised until this elderly woman contacted my office that this is not simple interest on the total sum over the years when a person is forced to defer because he or she is too poor to pay. It is compound interest, which is even worse, and I can go through the details of a case indicating how it makes it worse. If a person is paying €405 per year in property tax and defers because he or she is earning €15,000 or less, or now €18,000, that 4% is added annually. This means the person would owe €4,212 after ten years instead of €4,050 if the tax had been paid each year.

That would be if it was simple interest, but it is not. It is compound interest. In fact, at the end of ten years €5,103 in tax will have been paid, which is €891 more than the cost of ten year's property tax paid each year. A person will be punished for being poor by having an additional two years of property tax loaded on. For being too poor to pay the property tax for ten years a person is then forced to pay 12 year's of property tax. That is grossly unfair.

The elderly woman who contacted us to point this out was so embarrassed by the fact that she had to defer, that her income was so low and that she was unable to pay. She was also too embarrassed to even tell her family members about her predicament and her low income. This is what the Government is doing to the elderly, to the vulnerable and to income poor people who happen to live in a property that results in a certain valuation and the imposition of a certain level of tax. This is grossly unfair and regressive. It stuns me that Deputies can say it is a progressive tax. It is not a progressive tax in that regard.

This will also punish people in particular sectors who have lost considerable income during the Covid restrictions. These are groups I often talk about such as taxi drivers, musicians, artists, people in the performing arts and in tourism and so on. They are going to be punished. Their income will have gone down considerably over the past year and yet they are still to be landed with the same tax as somebody who might not have lost a cent, or indeed the multimillionaires and billionaires who have actually gained massively during Covid.

This brings me to my last question. What is the alternative? In our 2020 budget submission we costed in an alternative. For example, €400 million could be raised by not charging anything on a principal private residence and by charging €600 a year for a second house, €1,000 per year for a third and fourth house, and €1,500 per year for all houses in excess of four houses. That would be a genuine wealth tax and it would raise €400 million per year or, as we have proposed every year, a 2% tax could be put on the top 85,000 households that own 53% of all the household wealth and assets in the State, which this year is up to €880 billion, an increase of €37 billion on last year. The Central Bank's quarterly report stated that this is mostly driven by an increase in investments, currency and financial rises in assets. Why not tax them 2% and raise €2 billion to €3 billion a year? That is a hell of a lot more than the Minister is getting from the property tax and a hell of a lot fairer. They would not even feel it and the Minister would not have to punish people who have little income but who have a tax imposed on them because they happen to have their own home.

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