Billy Kelleher (Cork North Central, Fianna Fail)
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Question 9: To ask the Minister for the Environment; Community and Local Government the progress that has been made with the establishment of a property tax; and if he will make a statement on the matter. [31164/12]

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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The EU-IMF programme of financial support for Ireland contains a commitment to introduce a property tax for 2012. The programme reflects the need, in the context of the State's overall financial position, to put the funding of locally-delivered services on a sound financial footing, improve accountability and better align the cost of providing services with the demand for such services. It was considered that in light of the complex issues involved, a property tax would take time to introduce, considering no database of properties exists. In order to meet the requirements in the EU-IMF programme, the Government decided to introduce a household charge in 2012 as an interim measure.

By international standards, the revenue base of local authorities in Ireland is relatively narrow, with local authorities being disproportionately dependent on central government funding. The introduction in 2009 of the non-principal private residence charge represented an important step change in how local government is financed and was the first dedicated new source of funding for local authorities in some years. It did not, however, go far enough in addressing the imbalance in the sector's financing. A more effective broadening of the revenue base for local government will be achieved by the household charge this year in the fullness of time by the full property tax.

In February 2012, an independently-chaired inter-departmental expert group was established to consider the structures and modalities for an equitable valuation-based full property tax. The group has recently completed its work and submitted its report to me. I will now be considering the approach to the report in consultation with my Government colleagues.

Niall Collins (Limerick, Fianna Fail)
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When will the Minister publish the Thornhill report and will this be in advance of his policy decision on property tax?

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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This report will form the basis of discussions with my Government colleagues in the context of the budget and the funding of local government.

Niall Collins (Limerick, Fianna Fail)
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Will the Minister publish the report?

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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No decision has been taken yet.

Catherine Murphy (Kildare North, Independent)
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I ask for information on the expected revenue in 2013 from the proposed property tax. Are incremental increases envisaged? Is it intended that this money will be retained in the areas in which it is collected? The needs and resources model is unintelligible to anyone who studies it whereby some counties are net contributors and yet they have a poorer level of services than other counties. Is the property tax predicated on having a database completed prior to its introduction?

Clare Daly (Dublin North, Socialist Party)
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The Minister has clearly linked the property tax with the household tax. Does the Minister intend to move to the property tax next year, ahead of schedule, as some reports would seem to indicate or is it his intention to keep it for two years and then move to a property tax? He refers to a new source of funding in respect of the non-principal private residence and the household charge but, obviously, that is not the case as the funds collected here were offset against a reduction in central taxation. How does he view the property tax in that regard along with talk of having that income deducted from people's earnings? How does this fit with the idea of it being a new source of taxation if it were to be deducted at source?

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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People will be able to choose a payment option from a suite of options. The second home tax on second and subsequent homes was introduced in 2009 as a source of additional funding for local government. This will be merged with consideration of what we will do with regard to individual properties when the property tax is introduced in 2013 to 2014, as required under the EU-IMF agreement. The Government has to make a decision about how this charge will be levied and whether it will be based on the market value or site valuation. These issues are outlined in the report which must be considered. The Government has to make a decision and this will happen in the context of the budget.

The database is being developed and it will be of major assistance as it will provide for the first time a comprehensive register of properties in the State. Up to now it was not possible to send bills for payment of the household charge because this was the first new charge since 1961 and no database existed. We will have much more information about home ownership and we will be able to send invoices and bills for the purpose of this tax.