Róisín Shortall (Dublin North West, Independent)
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I am glad to have the opportunity to raise this matter. It is unfortunate that no Minister from the Department of Finance has come to the House to respond. While I welcome the Minister of State, Deputy McGinley, given that the issue affects virtually everybody in the country, it is a pity that nobody from the Department of Finance was prepared to attend.

There is a very real risk that many thousands of homeowners face being considerably overcharged for the new property tax. The local property tax is anti-urban, anti-jobs and above all takes no account of people's ability to pay. Contrary to the promises we were given, it is not a site-valuation tax. For all those reasons it is an unfair tax. However, the administration of the tax makes that unfairness even worse. The Revenue Commissioners used a complex statistical model to arrive at its estimate for each property throughout the State. However, obvious determinants of property price, such as size, number of bedrooms, condition, extension or garden size, were either imputed from area averages or did not form part of the model used.

People are generally not aware of this fact. It means that smaller homes can end up in a valuation band that is higher than the true value of that home. By its own admission, the Revenue estimate is up to €50,000 out in a large number of cases and up to €100,000 or more out in approximately 10% of cases. The guidance and background documentation provided makes this clear. The valuation band prediction is accurate in less than 50% of cases by Revenue's own admission, which is unacceptable in terms of providing guidance to the public on the matter. People are not aware that the guidance being presented to them by Revenue is so inaccurate in a majority of cases. Instead Revenue has used the model to provide highly crude valuation guidance based on area averages within each electoral division. However, because it is based on averages, in many cases this guidance is utterly meaningless.

I recently crosschecked last year's house sale prices in one electoral division in my constituency with the guidance provided by Revenue. Of the ten properties sold last year, seven did not correspond to the area valuation identified by Revenue. What practical use is this to people in that area? There is a real risk that many people will be overcharged because they are unaware of how unreliable Revenue's approach has been and they do not want to run the risk of second-guessing Revenue. To add insult to injury the reply I received this week to a parliamentary question confirmed that if a person pays more than is due and that becomes obvious later there is no mechanism for that person to get a refund. People are generally not aware of this either. What responsibility is the Minister taking for this? Does he accept that the system operating at the moment is very inaccurate and that steps need to be taken to provide much clearer guidance to the public to avoid people being overcharged?

Dinny McGinley (Donegal South West, Fine Gael)
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I thank the Deputy for raising this matter. Unfortunately the Minister for Finance and the Minister of State at the Department are unavailable as they are outside the country. The Finance (Local Property Tax) Act 2012 sets out in detail how the tax is to be administered and provides how a residential property is to be valued for local property tax, LPT, purposes.

LPT is a self-assessed tax and as the Minister for Finance, Deputy Noonan, has advised the House on many occasions, it is a matter for the property owner in the first instance to calculate the tax due based on his or her assessment of the market value of the property. For the purposes of LPT, values for properties under €1 million are organised into valuation bands, with an initial band up to €100,000 followed by bands of €50,000 between €100,001 and €1,000,000, so owners will not be required to provide a precise value for their property.

The Revenue Commissioners have prepared valuation guidance which, together with the owner's knowledge of a property, will assist him or her in assessing its value. This guidance should be used together with other sources of information including the Property Services Regulatory Authority's property price register, property sections of newspapers, information from local estate agents and property websites. When using Revenue's valuation guidance, property owners should consider the specifics of their property and if they feel that the guidance does not indicate a reasonable valuation, they should make their own assessment.

In the absence of a national residential property valuation system, the valuation guidance developed by Revenue is designed to help property owners in self-assessing the market value of their property by giving them average indicative values for their area. The guidance is based on sales in the past three years and provides a benchmark to help people consider whether their property is more or less valuable than the average in an area. This guidance will be helpful in the majority of cases, but there are always properties in an area which differ from the average.

Surprise has been expressed in some quarters at the fact that the valuation guidance does not accurately reflect the market value of a specific unique property. However, the valuation guidance explicitly states, "This service provides a guide to average market values of properties in a given locality and offers an indicative valuation band for properties depending on type, age and location. It does not provide market values for individual properties".

Revenue has made the guidance as simple as possible, and users need only know their property's type, age and location. The Revenue valuation guidance website combines two aspects. These are a simple point and click option to get an average valuation for an electoral district, and an interactive map showing relative valuations across electoral districts.

I will take this opportunity to explain briefly how property owners should use the Revenue guidance. The Revenue guidance may show the average valuation band for a semi-detached property in a particular location is between €350,000 and €400,000. If an owner of a two bedroom semi-detached property knows the majority of semi-detached houses in the area have three bedrooms, then the owner can reasonably expect the Revenue guidance to reflect the value of a three-bedroom property. This could offer a basis to adjust the valuation of the property downwards from the guidance average.

It is important to re-iterate that the Revenue guidance does not claim to value every house. Using the guidance requires a property owner to make an assessment based on his or her knowledge of the house, the neighbourhood, the house types and any factors he or she feels are relevant, as well as combining the Revenue guidance with the property price register and any other appropriate sources of information available.

Revenue's valuation guidance has been peer-reviewed and favourably endorsed by commentators who are very familiar with the property market. Those who are sowing seeds of confusion regarding the valuation process are not being helpful to the generality of taxpayers, who as Revenue point out, are tax compliant. Revenue's view is that its guidance will provide the correct valuation band for nearly half of all properties in an area and will be within one band either way for a further 40% to 45% of properties.

It is also clear that a substantial number of people disagree with misinformed claims about the Revenue online guidance, as it is being used extensively by the public. Up to Tuesday this week, in excess of 868,100 hits were recorded on the site and more than 188,400 users either opened the valuation guidance from the Revenue website or saved it to their computer.

Revenue has also provided for those who do not use the Internet by preparing paper copies of the indicative valuation band for each property type in every electoral district in the country. These are available from Revenue public offices and the major Citizens' Information Centre offices. Copies were also made available at briefing sessions held by the Revenue Commissioners in Leinster House for Oireachtas Members and their staff.

I agree people should not automatically pay the Revenue estimate. The estimate, as Revenue has consistently stated, including in newspaper advertising this week, is only relevant if the property owner does not file and return. Credit should be given to the owner's knowledge of the property market and his or her ability to work out a reasonable valuation for the property, certainly within €50,000 bands. The level of public debate on property valuation suggests that most people are engaging with the local property tax, have a good general sense of the value of their property, and are carrying out research to enable them to do their self-assessed return. I welcome this.

Revenue's press release on Tuesday, 16 April, stated 130,802 LPT returns have already been filed by property owners who, in the majority of cases, have made their own assessment of the valuation band for their property. This clearly shows people are following the self-assessment principles and making their best assessment of the value of their property.

Revenue's website cites additional sources to help in the valuation process, such as other property websites and information from local estate agents and newspapers. While the latter sources quote asking prices which tend to be higher than final prices, these should nonetheless help the property owner get a general idea of property values in their locality which can be used in conjunction with the other sources of information available.

In the context of a self-assessed tax, I am completely satisfied that Revenue's online valuation guidance is fit for purpose, that Revenue has been very clear about its scope and purpose, and that it performs at least equally well, if not better, than other sources of valuation guidance available. I am confident the valuation guidance will be useful for the majority of property owners in assisting them to value their homes, and that using this source and the other sources to which Revenue points, as well as the property owner's knowledge of his or her property, provides the basis for this self-assessment to be honest and reasonable.

I have no difficulty with opposition to this tax, or indeed to any other tax, but I am concerned some media commentators, some professionals in property-related businesses and, unfortunately, some politicians are creating confusion by making claims that are simply not true. I remind the House the local property tax is provided for in legislation passed by the Oireachtas, and I encourage Members to assist constituents in meeting their legal obligations.

Róisín Shortall (Dublin North West, Independent)
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At the beginning of his contribution the Minister of State said the average price in an electoral division is accurate in most cases. This is not actually true. I have already given an example where seven out of ten cases were inaccurate in one electoral division, and I can provide the information to support this. I call on the Minister of State to provide clearer guidance to people on how they can go about self-assessment in an honest way. Will the Minister of State consider making it clear to people that the correspondence they receive from Revenue is not a bill but merely an estimate, which is likely to be inaccurate in the majority of cases?

I also call on the Minister of State to be more forthcoming about the inaccuracies in the approach of the Revenue Commissioners. Will he consider updating the property price register to provide more detail on house size and bedrooms? Will he give guidance on the percentage reductions which should be applied on house prices achieved in 2011 and 2012 given the changes in the market since then? In many cases sale prices are only available for previous years. Will he remove Revenue's recommendation to base house valuation on local asking prices? We know that very often they are way off the mark. I call on the Minister of State to request the Minister for Finance to allow for a refund where a property is mistakenly overvalued and where it subsequently emerges a person has paid too much.

They should be entitled to a refund in those circumstances.

Dinny McGinley (Donegal South West, Fine Gael)
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The points raised by the Deputy will be brought to the attention of the relevant Minister and Department. I welcome the fact that the Deputy has had an opportunity to raise those matters here. I have repeatedly said that it is almost impossible to be accurate concerning house prices. Many efforts have been made and many sources have been employed to obtain guidance that is as accurate as possible, but at the end of the day it is up to people themselves to ascertain what the property is worth. We have used newspaper advertisements and many other sources to indicate that as accurately as possible.

In the area I come from in west Donegal, the indicative value of every house is in the second band of €100,000 to €150,000. Perhaps there are some houses there that are worth more than that, while some may be worth less, but it is just a guide.

Róisín Shortall (Dublin North West, Independent)
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The Revenue should make that clear then.

Dinny McGinley (Donegal South West, Fine Gael)
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I am confident that they come within those guidelines, although I cannot speak for other people obviously. The Deputy believes that the vast majority of people would not come within the indicative guidelines at all.

Róisín Shortall (Dublin North West, Independent)
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Will the Revenue say that?

Dinny McGinley (Donegal South West, Fine Gael)
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As far as I am concerned, and from what has been indicated, I am happy to come within the guidelines that have been indicated to me. Leaving that aside, what the Deputy has said will be brought to the attention of the Department.