Charles Flanagan (Laois-Offaly, Fine Gael)
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I am grateful to the Ceann Comhairle for allowing me to raise this matter and I am pleased that the Minister for the Environment, Community and Local Government has come into the House to deal with it. Thousands of home owners have been under a misapprehension about certain regulations for what is colloquially described as the second house charge, which was introduced in 2009. I wish to highlight a consequent anomaly in which I ask the Minister to show an element of redress and common sense. We were led to believe this charge was a tax on second houses, holiday homes and investment properties in the amount of €200 per annum payable in 2009. The tax applied to non-full time residences and became due on 1 September 2009. I make the case that thousands of people have not adequately registered or paid because they have been under a misapprehension as to whether there was a liability. Interest is running and penalties have been imposed resulting in bills of many thousands of euro having been amassed by people who had no idea they were subject to the tax. The assumption was that anybody who had a principal private dwelling - being the home in which he or she ordinarily resided - would not be liable.

In my constituency - I am sure this is true of other Deputies' constituencies - many people bought their houses as first-time buyers. They got their mortgages and moved in, but owing to economic necessity have left the jurisdiction of the State and emigrated to Australia, Canada or the UK because they could not find employment in this country. In many cases the mortgage could not be paid and they entered into an arrangement to let the house. They may have engaged somebody in caretaking the house - to mind the house for them in order to pay the mortgage until the economic climate improved to allow these people to return to friends and family in this country and resume residence within the jurisdiction of the State.

Local authorities have in many respects adopted a high-handed approach by issuing letters informing people that they may or may not be liable when a strict reading of the legislation shows a certain liability. I am asking that a waiver of interest and penalties be provided by the Minister to facilitate those people suffering because of the anomalous situation. The Consumers Association of Ireland recently adverted to matter by stating that in Dublin alone there may be up to 7,000 such houses where people because of economic necessity had to leave the family home, many returning to live with their parents. They made arrangements for a rental income to be paid on the house which they used to pay the mortgage to keep the banks from repossessing the houses. I believe the local authorities should have notified the people as to the liability - if, indeed, there was a liability. It is neither fair nor just to adopt a high-handed approach.

I refer to media reports at the time the tax was imposed. Headlines indicated that owners of second homes had two days to pay the charge and that residential investors must pay the money. However, there was no reference to those who by economic necessity had to leave the jurisdiction of the State and I am now asking for certain clemency in that regard.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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I know Deputy Charles Flanagan will agree that I do not write headlines for newspapers and that is not the basis on which we collect money nor can it ever be. It is the duty and responsibility of each homeowner to understand the law and be compliant with it. I wish to set out for the Deputy the issues involved.

The Local Government (Charges) Act 2009, as amended, broadened the revenue base of local authorities by introducing a charge on non-principal private residences. The charge is set at €200 and liability for it falls, in the main, on owners of rental, holiday and vacant properties. The charge on non-principal private residences, since its introduction in 2009, has contributed some €205 million to the financing of vital local authority services, including fire and emergency services, maintenance and cleaning of streets, street lighting, planning and development services, public parks, libraries, open spaces and leisure facilities, etc.

It is recognised that the existing revenue base of local authorities is narrow by international standards. This was a consideration in the introduction of the non-principal private residences charge in 2009. While the NPPR charge represents a dedicated source of funding for local authorities and is relatively stable, it does not go far enough in addressing the imbalance in the sector's financing. A proper broadening of the revenue base for local government is being brought about as a result of the introduction of the household charge in 2012 and the potential of the subsequent property tax in due course. This measure is significant because it recognises that local authorities should not be disproportionately dependent on central government funding. The 2009 Act is structured from a starting position of a universal liability for the charge in respect of all residential property. Liability arises each year on a point-in-time basis, which is 31 March in each year. A number of exemptions from the charge are provided for in the Act, the most significant being where a property is an owner's sole or main residence. The charge is on a self-assessment basis and it is a matter for an owner of a residential property to assess whether there is a liability to pay the charge in the first instance. The Act places the charge on non-principal private residences under the care and management of the local authorities, and application in particular circumstances is a matter for the relevant local authority. Perhaps that is an avenue the Deputy might wish to pursue his concerns on the matters he raised.

Where a person owns a property in which he or she does not live and his or her sole or main residence is another property, there may be a liability for the non-principal private residence charge in respect of the property owned by the person, unless it is exempted under section 4 of the Act. Interpretation of the legislation is ultimately a matter for legal advice.

I take this opportunity to clarify that the charge on non-principal private residences is not a second-home charge as it has been termed. The Local Government (Charges) Act 2009, as amended, provides for a charge on residences which are not the owners' sole or main residence. However, I note the Deputy's comments on mounting arrears owing to genuine reasons on the part of some homeowners who might not have considered themselves liable. I will investigate his concerns and seek a reasonable and practical solution with local authorities.

Charles Flanagan (Laois-Offaly, Fine Gael)
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I certainly welcome the Minister's concluding comments. However, I take him up on a point he made in the course of his reply which was that I might take up the matter with local authorities. Is he indicating therefore that different local authorities might adopt a different interpretation as to the imposition of penalties and surcharges or whether there may be a liability? That confusion is the nub of the issue. There does not appear to be a strict reading of the legislation across the board. I refer to a recent statement on the part of a spokeswoman for the Local Government Management Agency, which as the Minister will be aware, administers the collection of the charge for local authorities. She stated that the management agency does not know how many people, who own one property, are liable to the charge as it is enforced by individual local authorities and that there may well be a liability. This is the confusion. Either there is a liability or there is not; likewise, either there is flexibility or there is not.

There is considerable hardship on citizens of this State who have been forced to emigrate to Canada and Australia. In order to meet the mortgage repayments they were forced to enter into an agreement. Perhaps some of them are lucky to get people to enter into a letting arrangement to pay the mortgage while these people had to fend for themselves and their families abroad. I am asking for a common sense approach to apply to those who are not aware of it and who are now facing not only the charge but also considerable interest, surcharges and penalties, which have been accumulating since September 2009 and are imposing significant hardship and difficulty on individuals.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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As the Deputy will know it is often very difficult to interpret who is genuine and who is not when it comes to complying with the law and the collection of money. When arrears ultimately accumulate it is a regular excuse for people to claim they were not aware of their obligations under the law. It is a difficult one and I understand the Deputy probably has genuine cases in mind and I am obviously taking his constituents as very sound and solid citizens in that regard. However, the strict interpretation of and compliance with the law are matters in the first instance for the owner of the property and the people who are liable for the second or third home as the case may be. I am certainly conscious that there may often be some misinterpretation or different interpretations by local authorities and I will clarify that for the Deputy in so far as I can, but the law is quite straightforward. There is a liability in respect of the second home and a levy of €200 is charged. I have encountered cases in my constituency in which people believed they were genuinely not informed or aware of it even though it is their responsibility to be informed and aware of it. Anyway, we will see what we can do to ensure compliance with the law and collection of the charge in a way that does not bring about greater financial hardship on the individual.