Phil Hogan (Carlow-Kilkenny, Fine Gael)
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Question 26: To ask the Minister for the Environment, Heritage and Local Government his views, in the context of funding local government, on a new property tax to allow local government to be more self-financing; and if he will make a statement on the matter. [25399/09]

John Gormley (Dublin South East, Green Party)
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In October 2008, as part of budget 2009, the Government announced its intention to introduce a €200 charge on non-principal residences and I have arranged that the legislation necessary to give effect to this measure will be published today. The charge will apply mainly to the owners of residential rental property, holiday homes and vacant properties unless the vacant property is newly-constructed but unsold.

The charge is estimated to raise some €40 million annually and it will be collected and retained by local authorities. It is the first locally-based revenue stream to be made available to local authorities since the abolition of domestic rates over 30 years ago. I consider this to be a very significant development - it will reduce the dependency of local authorities on central funding and it will be a stable income stream, unlike the transaction-based property taxes on which our economy had become unduly dependent. These taxes – property-related stamp duty, capital gains tax and value added tax - are volatile and over-responsive to prevailing economic conditions.

More generally, the Commission on Taxation has been asked to examine our taxation system with particular reference to a number of factors, including the options for future financing of local government. I have no doubt that the commission will consider this matter in depth, including the matter of property taxes generally, and I await its report. The Government will give careful consideration to the commission's report, which will be available in the near future.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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I was anxious to elicit whether the Minister was in favour of a universal property tax on principal private residences as well as other residences, but he chose not to answer that question. Given the softening of the ground that is taking place on this matter, would the Minister indicate whether he favours a universal property tax in advance of the review of the programme for Government?

Charlie O'Connor (Dublin South West, Fianna Fail)
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Does the Minister wish to rise to that?

John Gormley (Dublin South East, Green Party)
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No, I do not. The Deputy knows I am not here to give my personal views. I am speaking as a member of the Government.

Terence Flanagan (Dublin North East, Fine Gael)
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Go ahead, we will not stop you.

John Gormley (Dublin South East, Green Party)
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We are anxious to ensure there is an adequate income stream, particularly at local government level. I am awaiting the deliberations and conclusions of the Commission on Taxation with a certain curiosity. I hope it will broaden the base of local government funding. The most significant aspect of today's legislation, and I have not heard if the Opposition parties welcome it----- 3 o'clock

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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The Minister has not published it yet.

John Gormley (Dublin South East, Green Party)
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It is available and is-----

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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We hear so many announcements that we do not know the details.

John Gormley (Dublin South East, Green Party)
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It is there and is being published today.

Charlie O'Connor (Dublin South West, Fianna Fail)
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Allow the Minister speak.

John Gormley (Dublin South East, Green Party)
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The Deputy knows very well what is in the legislation.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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I do not.

John Gormley (Dublin South East, Green Party)
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It has been outlined. The Deputy knows only too well what is in it.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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There may be other issues.

John Gormley (Dublin South East, Green Party)
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It is a €200 charge on non-principal residences which will be collected locally. Due to the abolition of rates 30 years ago, there has been a depletion in revenue streams for local authorities.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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I agree with the Minister.

John Gormley (Dublin South East, Green Party)
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This is historic. It is the first time that we have introduced any form of revenue raising for local authorities since that time.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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Has the Minister ever heard of motor tax?

John Gormley (Dublin South East, Green Party)
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Motor tax is not collected locally. This is important. It was put forward as an idea for local funding but the Deputy must ask himself whether it is the best way of funding local government.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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Let us see the legislation.

John Gormley (Dublin South East, Green Party)
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That is the question. The legislation is available and I ask the Deputy not only to read it, but also to welcome it.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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I will decide that.