Dessie Ellis (Dublin North West, Sinn Fein)
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I thank the Minister of State for attending and the Ceann Comhairle for selecting this issue.

By definition, tenants are not the owners of a property. They may have rights in a property, but these are limited and only for the period of their tenancy and with the agreement of their landlord. They are far less powerful in this regard than those who own their homes, ignoring the fact that many Irish people only own their unaffordable mortgage and are struggling to hold on to their homes by any means they can.

The property tax was and remains the wrong tax at the wrong time. In its normal application it fails to recognise the ability of a homeowner to pay and ignores such issues as negative equity and distressed mortgages, issues which are still rife in the Ireland of 2015. The property boom and crash forced more people than ever before into renting. Now nearly one quarter of all Irish people live in rented accommodation. The private market has always been unwilling to provide housing as needed and is only willing to do so when a clear and easy profit is possible. The State, therefore, has a central role in ensuring sufficient, affordable, comfortable and secure housing is available. Unfortunately, it has ignored this role for decades. As a result, the problem of housing need on the bottom rung has grown worse and those living in social housing are ghettoised in excluded communities in which unemployment, poverty and educational disadvantage are commonplace. These tenants have suffered most at the hands of two austerity Governments. They have seen all manner of cuts to social protections, vital supports and services, while their children have been left in overcrowded classrooms, with fewer SNAs and other staff to deal with the myriad of educational problems poverty brings. These tenants now face the possibility, as is already the case in Limerick, of having to pay the property tax. The tax the Labour Party claimed was a wealth tax is now a tax on social housing which will be paid for by the very one who have least to give.

Last month Limerick City and County Council decided to add a charge of approximately €87 to the rents of its tenants in order to recoup the cost of the local property tax it must pay on its social housing stock. This practice, although common in the private market, strictly, is illegal. It is wrong of the council to do this, but it must pay its bill, which is the real problem. The taxing of social housing by the Government, through the local property tax, is the real problem. This is a decision made by the Government which cannot hide behind the council which is trying balance its books - its legacy after years of austerity - and now facing a tax on its housing stock. Given the Government's recent pronouncements on housing provision, a tax on social housing seems to be counter-productive.

I am doubtful about the Government's housing strategy claims, but if it delivers such numbers of houses, how will councils and voluntary bodies afford to pay the property tax bill? I call on the Minister to do two things. First, he must end the practice of charging property tax on social housing and, second, if he is unwilling to do so, he should issue a diktat to councils that under no circumstances should they pass on property tax to their tenants. Shared ownership is another area in which it is unfair for councils to pass on the property tax which will impact on tenants in a myriad areas.

Paudie Coffey (Waterford, Fine Gael)
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I thank the Deputy for raising this issue which I am taking on behalf of the Minister, Deputy Alan Kelly.

The Government decided to make local authorities liable for the local property tax in order that local authority tenants would be treated in the same way as tenants in the private sector in which landlords may pass on the cost of the tax to tenants in the form of increased rents, if they so wish. Thus, the Finance (Local Property Tax) Act 2012 provides that local authorities are liable to pay LPT in respect of dwellings that they own, other than dwellings that accommodate persons with special housing needs. Under the Act, chargeable local authority residential properties are deemed to be in the lowest valuation band until 2016, at least, and the annual LPT liability is €100 per local authority dwelling.

Housing authorities are responsible, under section 58 of the Housing Act 1966, for determining the rents of their dwellings, subject to relating rent levels to household income and requiring low income households to pay a lower proportion of income in rent. Within these parameters, it is a matter for housing authorities to ensure their rental income reflects, as far as practicable, the cost of managing and maintaining their housing stock. Section 58 of the 1966 Act does not empower councils to levy a specific charge on tenants in respect of LPT. However, under the enactment, they may set rents at levels that will generate funds to pay for expenses relating to their tenanted accommodation, including their LPT liability. It is entirely a matter for housing authorities to decide if they wish to do this and the Minister has no function in the matter. It would not be appropriate, therefore, for me to comment on the manner in which individual councils, including Limerick City and County Council, exercise their statutory rent functions.

Section 31 of the Housing (Miscellaneous Provisions) Act 2009, as amended, provides for the introduction of a national differential rents framework that will result in a significant harmonisation of local authority rent levels nationally, while retaining some discretion for individual authorities in setting rents in their areas. Under this legislation which contains similar provisions to section 58 of the 1966 Act in regard to charges, local authority rents will continue to relate to household income and composition and contributing to the cost of managing and maintaining the tenanted housing stock.

Dessie Ellis (Dublin North West, Sinn Fein)
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It is important to realise that the local property tax has only been frozen until 2016 and that after that date, we will see a huge jump in the charge across the country. This will affect everyone but, in particular, the least well-off in society, local authority tenants. It is not good enough to say it is at the discretion of local authorities as to whether the charge should be imposed. The Government should issue a diktat to local authorities that the imposition of this tax is unacceptable. We need to protect those who find themselves in this position. The cost of housing has risen considerably and we are now heading towards another property bubble. This issue is ongoing and the tax people will pay after 2016 will be huge. People are struggling and have seen a series of taxes imposed on them, including the household charge, water charges and others. Many tenants are on social welfare payments, while many are lone parents. Many of those who are working are in low paid jobs. These are not the rich people who can afford to handle a huge increase or an extra charge. Tenants did not anticipate paying this charge because the house belongs to the local authority. It looks as if, however, that tenants will end up paying it.

In some cases, councillors voted to reduce the property tax by 15%. This happened in Dublin and other areas. Sinn Féin councillors instigated this move in Dublin City Council and other areas, but they were opposed by Labour Party councillors at the time. This was remarkable considering that they were supposed to represent the people.

Joe Costello (Dublin Central, Labour)
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It was a disgraceful decision by Sinn Féin.

Dessie Ellis (Dublin North West, Sinn Fein)
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The Deputy knows the truth. Labour Party councillors voted against the proposed 15% reduction.

Paudie Coffey (Waterford, Fine Gael)
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While I acknowledge some local authorities reduced the local property tax, it does not come without a cost. As the Deputy knows, reducing it reduces the budget available for delivering front-line services such as services for the homeless that we wish to prioritise. It is a matter for local authorities to prioritise what they feel the local property tax should be spent on. I will say no more on that: it is a matter for local authorities.

However, as I have already stated, I am precluded from commenting on the proposals of any individual housing authority on the rents they charge for their tenanted accommodation. The reality is that local authorities have to pay their local property tax liability for their residential properties and housing stock. It is a matter for each local authority to decide in the context of financing its overall operations how it will meet this local property tax liability and whether it should recoup some or all of the cost of the local property tax from its tenants. Striking the appropriate balance in this matter is a key function of local authority management and I do not propose to second-guess individual local authorities on the decisions they make in this regard.