Paschal Donohoe (Dublin Central, Fine Gael)

I thank everyone who contributed to this debate. I took careful note of the points the 24 speakers have made. I will begin by thanking Members from the Government benches and elsewhere who voiced support for the Bill and who recognised the important role the local property tax plays in supporting public services and funding local authorities. I appreciate their support. As that support is a given I will spend much of my time dealing with the different critiques that have been made of this legislation and the local property tax.

There were six main areas of criticism: first, that the charges are unaffordable; second, that not enough power resides with the local authorities; third, that local authorities do not have enough money; fourth, that the Bill is not progressive; fifth, people criticised how local authorities are funded, particularly in the context of the equalisation fund; and, sixth, the role played by investment funds and private capital was criticised.

I will begin with the third point, namely that local authorities do not have enough funding. As I do so, I am very conscious that there is a protest taking place outside the Dáil. Members of the Opposition parties are going out to address those taking part and calling for more to be done on funding. On one hand, we are saying that local authorities need more money and that more money needs to be spent on housing, but then the same speakers who make that charge argue the local property tax should be abolished. I put it to the House that it is difficult to do both. One cannot argue that local authorities should get more money and at the same time argue that the local property tax that helps fund them should be abolished. The argument will then be made that we are collecting taxes in other areas, but those taxes are being spent. They are being spent on public services as matters stand, so you cannot double count it. People cannot say that they want to get rid of local property tax and that things can be funded from other taxes we are collecting when those other taxes are already being used to fund public services and when the Opposition often states that there need to be more public services paid for out of those taxes. I put it to the House that there is a real case of wanting more of something – and we all want more houses and services to be coming out of our local authorities – and then people wanting to abolish a tax that helps pay for what they are seeking. I do not think that is credible. The country has already seen through it. When we face so many challenges in our society and when we need to fund public services better, the argument put forward does not stand up to scrutiny.

Second is the idea that the local property tax is unaffordable for many and that is an unfair charge. Let me acknowledge, as I have done on many occasions, the impact that inflation is having and that cost-of-living difficulties in recent years have had and continue to have on so many. However, at each point at which the re-evaluation of the local property tax has taken place, real efforts have been made to ensure that as we ask people to pay more - and pay more with regard to their homes, which is always a sensitive point - we have made great efforts to try to ensure that the additional charge is affordable and is below the rate at which the value of homes has increased. This Bill continues that approach. We have widened the bands and cut the core rate of LPT to ensure that the vast majority of homeowners will still be within the same local property tax band that they were in the past. While this does mean that even if the band they are in remains unchanged they will be asked to pay a higher local property tax charge, by widening the band and reducing the rate the Government has made great efforts to try to help ensure that the additional local property tax charge that will result from this Bill will be affordable for as many people as possible.

Third, we have heard the criticism that there is not enough power residing with local authorities. I accept that we have to make more decisions and look at how we can make local authorities even more autonomous and powerful. My colleague the Minister for housing and local government, Deputy Browne, is looking at issues relating to this and is conducting a review. However, there are few things that will contribute more to the underdevelopment of local authorities in the time ahead than abolishing the tax that local councillors have a say in spending part of. One of the reasons we had to make a decision to ask the Oireachtas to consider this Bill more quickly is in order that we can fit in with the needs of local authorities, from a public consultation perspective, so that their views can be considered on how the local property tax can be spent. On the one hand, I have heard calls from many saying that local authorities need more power but, on the other, when it comes to the tax that gives them more power than many other taxes that this House considers and legislates for, those same people are against it. I look forward to debating that inconsistency on the later Stages of this Bill.

Fourth, there is an idea that the local property tax is not progressive. In particular, the point is made that even if it takes account of the value of a home, it does not take account of the income associated with that home. I accept that this is an important point. It is the reason we have waivers in place and why this Bill increases the income thresholds by which some can access waivers. The latter is because we appreciate that for those on low incomes, this can be a very difficult tax to pay. However, the value of a home when this tax is revalued is a very credible effort on the Government’s part to examine how we can ensure the amount of the local property tax charged relates to the income somebody may have. We know that can break down at times because, as some Deputies stated, the value of a property does not correlate to income. That is the reason why we have waivers in place.

Fifth, I heard criticism of the operation of the tax and, in particular, the operation and maintenance of the equalisation fund. I want to make the point again that every euro that is collected in this tax goes back to the payment of public services at either local or national level. While I have heard criticism about the operation of the equalisation fund and the fact that local authorities should be able to keep more of the money that is collected at local level for local use - I heard that point being made by many - it is still important to emphasise that all of the local property tax that is collected is used to fund public services either at local or national level.

Sixth, I heard the criticism again of investment funds - the so-called vulture funds. Those who make that charge - and this is a debate in which I have participated over many years - appear to suggest that there should be no role for private capital in the funding of new homes in our country. When we talk about private capital, all we are talking about is the savings that are held in other parts of the world playing a role in delivering more homes here.

Those are some of the key points that emerged from the 24 contributions on the Bill we heard in the past couple of hours.

No tax is perfect. There are always drawbacks and criticisms of any tax, but this tax, overall, plays an important role in the funding of local government in our country and the delivery of important services and infrastructure. The Government continues to be very conscious of the challenges of the cost of living and affordability. With the changes we are making, we aim to recognise the challenges that many are facing.

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