Dessie Ellis (Dublin North West, Sinn Fein)
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After much campaigning on the plight of the residents of Longboat Quay, it was thought that they had at least achieved some respite when the Revenue Commissioners wrote to them accepting valuations in the lowest band for their local property tax, or LPT, liability. Last week, however, they were shocked to receive letters from Revenue reversing this decision. Can the Minister for Finance explain why? At the core of the issue are families and individuals who have done nothing wrong but find themselves living in homes that are dangerous. The fact is that the homes are valueless at this point in time. The Revenue Commissioners appeared to have seen sense and adopted a sensible, humane approach by reducing the LPT to the lowest level. Frankly, it was obscene that these families were asked to pay anything, but the Revenue Commissioners at least showed some willingness to use common sense and the flexibility permitted to them to reduce the band. However, the bureaucratic wheels turned and a second letter was sent only this week to the residents.

The language in that letter is shocking. According to it, the letter of 20 November "incorrectly indicated that the declared valuation for your property could be reduced and I wish to apologise for any inconvenience caused". This bureaucratic reply does not address the issue at hand. It is unfair to ask these families or those in similarly affected complexes, such as Riverwalk Court, to pay the local property tax, LPT. To tell them that their bills would be reduced was a welcome step, but that has been taken away by the Revenue letter. This incompetence is stunning.

Leaving all of that aside, we must address the core issue, that is, why people who have been through so much are still being asked to pay a tax that is clearly not set at the value of their homes. There are probably only a few days left in which to fix this problem if the Minister insists that it is a legal issue. Will he confirm that, due to the cynical postponement of the next valuation date for LPT, the residents are stuck in their current band for a further three years? Can the Longboat Quay complex or other addresses be added to the list of estates that are exempt from LPT?

After much campaigning last year on the residents' plight, we have come to this. That they are being asked to pay the full LPT is mad. There should be exemptions in such cases. Previously, there were exemptions. At first, the residents were given the indication that exceptions would be made, but it now appears that this leeway has been reversed. Will the Minister explain the reasons?

Michael Noonan (Limerick City, Fine Gael)
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I thank Deputy Ellis for raising this issue. The introduction of the LPT formed part of a broader approach to the taxation of property that aims to replace some of the revenues from transaction-based taxes, which proved to be an unstable source of Government revenue, with an annual recurring property tax, which international experience had shown to be a stable source of funding. Stability needs to be at the core of our public finances now and in the years ahead. LPT enables us to achieve the goal of stability in a way that does not directly impact on employment. From the start of its term, the Government has been unwavering in its determination to do everything in its power to protect and support the creation of jobs. Job creation has been the Government's top priority. The LPT, which is a tax on assets rather than employment, will not adversely affect job creation.

The Government decided that the LPT should be centred on the principles of equity, transparency and simplicity and that a universal liability should apply to all owners of residential property with a limited number of exceptions. Limiting the exceptions available allows the rate to be kept to a minimum for those liable persons who do not qualify for an exemption. Deputies will appreciate that reliefs and exemptions have costs that must be paid for and their introduction must be considered only where there is a clear economic and social policy that needs to be addressed. Even with the limited number of exemptions available under the legislation, I understand that exemptions were claimed in respect of some 42,000 properties for the 2014 LPT. The Finance (Local Property Tax) Act 2012, as amended, provides that any property that is in use as, or that is suitable for use as, a dwelling house is subject to LPT.

The current valuation period is 1 May 2013 until 31 October 2019. The period was recently extended from 31 October 2016 on foot of legislative amendment via the Finance (Local Property Tax) (Amendment) Act 2015. This amendment was introduced to give property owners certainty in regard to valuations and to remove concerns that LPT liabilities could rise significantly, particularly in urban areas, as the property market recovered.

The 1 May 2013 declared valuation of any residential property is not affected by subsequent repairs or improvements made to a property or by any increase or decrease in property prices that might occur over the course of the valuation period. The LPT due for any residential property is based on the market value at 1 May 2013. Where structural defects are detected two years later, as happened in the Longboat Quay complex, they may affect the current valuation of the properties. However, they do not change the valuation retrospectively. Therefore, there is no basis in law to reduce the valuation during the LPT valuation period.

I understand that, due to the error to which the Deputy referred, a small number of property owners in the Longboat Quay complex received letters from Revenue indicating that a reduction in valuation was possible. On discovering the error, Revenue immediately wrote to the persons involved apologising for the incorrect information.

Dessie Ellis (Dublin North West, Sinn Fein)
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I accept that the LPT was set in May 2013, but that valuation was high and many of the residents in Longboat Quay did not fully understand the problems or know what was about to happen. A large number of them are in a serious situation, have needed to spend money and are going through the inconvenience caused by what has happened at the estate, but the Minister is sticking by the mantra that the LPT is virtually set in stone. Previously, however, there were exemptions. At one stage, for example, houses that were in NAMA or had not been properly taken in charge were exempted. There is a precedent. It would be a small gesture if we were to make exemptions in cases like this one. Simply being told that a letter was issued in error has been a blow to the residents, who believed that there was some hope of relief. Turning around now is very unfair to them.

Come 2019, when the property tax is valued at a new rate, there will be a major change for everyone, not just those in Longboat Quay, because of rising values in the city. This issue will have to be addressed. Previously, the Minister stated that he would consider it when it arose, but that assumed he would be in power. This issue will affect many people because their valuations will be at higher rates than is the case currently.

Michael Noonan (Limerick City, Fine Gael)
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I will give the Deputy further information. Revenue incorrectly replied to a small number of property owners in the Longboat Quay complex confirming that a reduction in valuation was possible. This was an error and the letter should not have been issued. Revenue only realised the error when further letters were received from a large number of residents of the complex seeking similar treatment. On discovering the error, Revenue immediately wrote to the original persons involved apologising for the incorrect information. Revenue also wrote to the other property owners who were seeking similar reductions to confirm that the valuations could not be reduced. Revenue has confirmed that, as standard practice where an error is made or taxpayers are inadvertently provided with incorrect information, contact is made with all affected parties as soon as the mistake comes to light to apologise in the first instance and to ensure the correct information is quickly provided and clarified as necessary.