Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

I want to deal with the substance of the amendment before I deal with some of the additional points that were made. The Bill provides for the amendment of the definition of "residential property" in two ways. First, the part of the adjoining land to be valued with the House where that land exceeds 1 acre will be specified to be that part that is most suitable for occupation and enjoyment with the House. Second, the reference to "acre" is being changed to "hectare".

There seems to be some misunderstanding of this section and of the amendment that has been tabled. The existing definition of "residential property" is being restructured to make it clearer and more readable and this may have contributed to the impression that there is a significant change in approach. Most of the amended definition is contained in the existing definition and, therefore, there will be no change for the vast majority of property owners.

Since the LPT was introduced, the value of a property has included any associated buildings or structures such as sheds, garages and any outdoor areas that are adjoining, such as yards and gardens. However, where the area occupied by the elements other than the House exceeds 1 acre, it is only the area up to 1 acre that must be valued. This applies to all residential properties, irrespective of whether they are located in a rural or an urban area. This is the position and the amendments to the definition of "residential property" do not change this treatment.

What is being addressed in this Bill is that the current definition leaves open the question of the part of the land that should be valued as the allowable acre where the land exceeds 1 acre. This is at variance with the treatment applied to the capital gains tax exemption for the disposal of a person's principle private residence and the definition of "residential property" for stamp duty purposes.

In these cases, the part of the acre to be exempted or treated as residential property is the part that is most suitable for occupation with the residence. Typically, that would be the part closest to the home, but not necessarily so, depending on the particular facts and circumstances. The reason for including such a provision in tax law is to prevent any property owner seeking to include part of the adjoining land furthest from the house in the allowable acre, as this is likely to be the least valuable part. In practice, this amendment will only have implications for those property owners whose grounds adjoining their houses are well in excess of 1 acre. The treatment is being changed to align it with capital gains tax and stamp duty.

Statutory references to the measurement of land in acres are not in line with EU standards. The correct current measurement for land is hectares. The hectare equivalent of one acre is 0.4047 ha. The purpose here, then, is to provide clarity in cases where a property exceeds an area of 0.4047 ha, which is equivalent to 1 acre. In other words, therefore, the area of land is not being affected by this change. Charges have been made here tonight which are typical of the approach taken to this amendment. It has been suggested that we are, via this section of the Bill, seeking to expand the area which will be subject to the local property tax regime. That is not the case. What is happening is simply a change in the way of measuring the area. The scale of the area has not changed.

Among other points raised this evening, many speakers referred to the bill for local property tax continuing to be one that many people find difficult to pay. I accept, as well, the suggestion that this is a bill which continues to cause anxiety and worry for many. Again, however, the changes being made to widen the bands and cut the rate of the local property tax are being enacted to ensure that we have done all we can to try to ensure that this will be an affordable bill for as many homeowners as possible. Most homeowners will not see an increase in their local property tax bill due to the changes in this legislation. For those who will see an increase, many will experience an increase of approximately one band. I again accept that for many people this is a bill which is hard to pay. However, we have made these changes to try to do what we can to make the local property tax bill as affordable as possible for many after a period of nearly eight years in which property prices have increased.

Regarding some of the charges made, I emphasise that the area concerned has not changed. Only the unit of measurement has changed. The other changes made regarding the definition of the area or residential property that will be subject to the tax seek to clarify the situation as it is now. Therefore, when I hear charges being made by some Deputies that this is an attack on rural Ireland and on particular forms of accommodation, those making these charges either have not read this section of the Bill or perhaps do not understand it. I appreciate that many elements of this Bill are technical and that is why an explanation is merited. At least some of the Deputies making such a claim here tonight, however, have not bothered to read the section and are quite happy to misinterpret it. They come in here then just to make an unfounded charge. For some Deputies who have done that this evening, that is all this is about.

I heard some Deputies speaking on behalf of the Rural Independent Group saying that they are against this charge and that they also want more money from it. What is that to offer to the people on whose behalf they are speaking here this evening? One Deputy said that he hopes people are watching this debate. The hour is either very late or very early and viewers may be few, but I ask those who are watching to consider what these Deputies are offering. They are suggesting that they want to get rid of the local property tax and that they want more money from it at the same time. That is what they are offering.

I am glad that I had the opportunity to be here when Deputy Mattie McGrath made his contribution. He referred to a "noose around the necks". What kind of language is that to use on an issue like this? What kind of an image is that to use in a debate on taxation? I know how important taxation is. God knows, I know how changes like this affect so many. The reason Deputy Mattie McGrath uses that kind of language, however, is because he has nothing else to offer. I am glad he is here in the Chamber to allow me the opportunity to say that the language he used yesterday, in respect of other legislation, in this House was disgusting, cynical and disgraceful. It is all too typical of Deputy Mattie McGrath, given how little else he has to offer, that he would come into this House and use that kind of language again.

If we want to have a debate, which we do, and do so regularly, concerning the pros and cons of legislation, at least let us try to do that on the basis of some facts. If Deputy Mattie McGrath cannot be bothered to do that, then maybe he might just reflect for a moment on the language he uses and what that language means. The language he uses demeans him, it demeans the argument he is putting forward and it demeans the people he pretends to represent.

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