Paschal Donohoe (Dublin Central, Fine Gael)
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I move: "That the Bill be now read a Second Time."

The local property tax is due for revaluation on 1 November of this year. I am introducing this Bill to make a number of important changes to the structure of the local property tax so that they can take effect from this date, in line with the commitment given in the programme for Government.

This tax was introduced in 2012. The design of it was considered by an interdepartmental group chaired by Dr. Don Thornhill. It became payable in 2013. This was the largest extension of self-assessment in the history of the State. It is now well embedded within our tax system. It has broadened our tax base, and has now brought in approximately €6 billion for local services since its introduction in 2013.

This year will mark the second revaluation of LPT since it was introduced. The first one occurred in 2021. In July 2021, the Finance (Local Property Tax) (Amendment) Act 2021 was enacted and made a number of important changes. These included a revised method for calculating LPT liabilities, regular revaluations and the bringing of new properties into the LPT charge. It ceased certain exemptions, increased income thresholds and decreased the interest rate for deferrals and included a number of administrative and technical reforms. These changes had a significant impact. More properties were brought into the scope of the tax which broadens the base. The 2021 Act provides for the inclusion of new properties for LPT purposes on 1 November each year. In 2020, there was €480 million collected in LPT. This increased to €521 million in 2023, an increase of 9%. The Act also provided that the next revaluation would take place on 1 November 2025.

According to the Central Statistics Office, property prices have increased by more than 20% nationally since November 2021. The largest growth in property values has been experienced in Border, midland and western regions, with average inflation of 33% recorded. Average property price growth in Dublin, for all types of residential properties, was 18%. The programme for Government commitment in relation to LPT was to "ensure fairness and stability in Local Property Tax payments and continue to retain revenue collected locally in the same local authority." Analysis from the Revenue statistics branch has shown the expected yield from LPT under 2021 valuations for this year would be €566 million. If revaluation of properties were to proceed without any amendments to the bands or rates, the yield from LPT would increase by one quarter. Approximately 70% of properties would move up at least one band.

In light of the programme for Government commitment, and to avoid a significant increase in LPT liabilities for householders, this Bill proposes to the amend the charging structure for LPT, and to make a number of other important administrative and technical amendments. Section 7 is the most noteworthy aspect of the Bill, which is the provision to amend the charging structure of LPT. The new approach maintains the number of bands at 20, with all bands being expanded by 20%. Revenue modelling predicts that 96% of homeowners will remain in their existing band.

The basic rate of LPT, which applies to all properties valued up to €1.26 million, is to be reduced from 0.1029% to 0.0906%. This will result in an increase in base LPT charges because the LPT charge is calculated on the basis of the midpoint of the valuation band, and midpoints increase as a result of band widening. The fixed charges for bands 1 and 2 will be increased from €90 to €95 for band 1 and from €225 to €235 for band 2. Properties valued between €1.26 million and €2.1 million will be charged at 0.0906% on the first €1.26 million, with a subsequent 0.25% on the balance of a midpoint value in excess of €1.26 million. Properties in band 2 will be charged on individual property values as before, namely 0.0906% on the first €1.26 million, 0.25% between €1.26 million and €2.1 million and 0.3% on the balance.

The changes we are making are fair and progressive. LPT charges will increase by 5% or 6% for homes valued under €1.26 million. Homes valued between €1.26 million and €2.1 million will see their base charges increase by 7% to 14%. The increases are modest but will yield an additional €45 million in revenue that will provide important funding for local services.

Section 10 provides for an increase in the income thresholds for LPT deferrals to be increased to €25,000 for a single person or €40,000 for a couple. It also provides that the income threshold for a partial deferral be increased to €40,000 for a single person and to €55,000 for a couple. The 2019 interdepartmental review of LPT recommended that these income thresholds be reviewed regularly with reference to movements in the consumer price index, wage growth in the economy and changes in fixed-income payments by the State. These changes have been made considering all these factors and the high inflation of recent years.

Section 8 proposes a change to the local adjustment factor, LAF. Local authorities have discretion to adjust the LPT rate collected in their areas up or down by 15%. The Bill as published would allow local authorities to vary the LPT upwards by up to 25% from 2026 onwards. This will provide local authorities with greater flexibility in relation to the LPT yield for their respective areas. I wish to highlight that I intend to bring forward an amendment to this section on Committee Stage. The Minister for housing has outlined the significant administrative challenges for local authorities if the changes come into effect for 2026. The amendment I will propose will defer the introduction of the increase to 25% for one year to 2027.

In a revaluation year, local authorities are required to notify the Revenue of their LAFs by 31 August. As county councillors do not meet in August, this means decisions must be made by the end of July. Before the LAF meeting, local authorities are required to hold a public consultation of 30 days, prepare a report on this consultation and a financial report for elected members a week before the meeting. Given the likelihood of when this Bill will be enacted, enough time would not be available for local authorities to undertake the public consultation required on the increase to 25%, hold the necessary meetings and notify the Revenue with the time now available. Additionally, many local authorities have made the LAF decision for next year under the current provision of a maximum increase of 15%. In light of the time available, it is not now possible for them to revoke the previous decisions made and conclude a new LAF process. For these reasons, and after consultation with the Minister, Deputy Browne, I intend to seek a deferral of this provision by one year on Committee Stage.

I also wish to highlight a second amendment of a more technical nature that I intend to introduce on Committee Stage. This concerns the partial relief on LPT for a property adapted for use by a person with a disability. The Finance (Local Property Tax) Act 2012 provides for a reduction of €50,000 in the chargeable value of a property for homes that have been adapted in this matter. This is equivalent to the differences in LPT valuation bands between 2013 and 2021. The policy objective of this is to ensure that disabled homeowners whose properties have realised an increase in value due to necessary adaptations having been made are not liable to a higher LPT charge as a result of these changes.

While the bands were widened in 2021 to €87,400, the Finance (Local Property Tax) (Amendment) Act 2021 did not introduce a corresponding amendment to the Finance (Local Property Tax) Act 2012. This was due to a drafting oversight. When this was identified, my Department requested the Revenue to allow a reduction in the chargeable value of €87,500 on an administrative basis to ensure a reduction of one valuation band for impacted taxpayers, and that has been the practice since then. As part of this Bill, the valuation bands will be widened to €105,000. The second amendment I am proposing will reduce the chargeable value of a property by this amount for homes that have been adapted in this manner and where the conditions are met. This will ensure that the administrative practice in place since 2021 will be put on a legislative footing. It will also ensure that homeowners with a disability who have had their homes adapted to make them more suitable and whose homes are worth more as a result of these adaptations can avail of a reduced valuation band and, ultimately, pay the LPT charge that would be due if they had not made the necessary adaptations.

Returning to the main provisions of the Bill, sections 4, 5 and 11 relate to the six-year exemption from LPT for homes damaged as a result of the use of defective concrete blocks. The six-year exemption currently only applies to properties in counties Donegal and Mayo, as provided for in the Dwellings Damaged by the Use of Defective Concrete Blocks in Construction (Remediation) (Financial Assistance) Regulations 2020. However, the scheme has now been amended to include counties Clare, Limerick and Sligo since the LPT was last amended in 2021. These sections will ensure that homes in these additional counties eligible for the scheme are also eligible for a six-year LPT exemption.

Section 9 allows eircodes to become a mandatory field in LPT returns. This will help in eliminating errors such as written correspondence issuing to the wrong property as a result of identical or similar addresses.

Section 6 sets the duration of the upcoming valuation period to five years, commencing in 2026 and ending in 2030, with future valuation periods also lasting five years. This will help to provide certainty to homeowners on their LPT charges, while ensuring properties continue to be revalued on a frequent basis. The next revaluation will be on 1 November 2030.

The Bill also contains two sections that relate to other taxation matters. The Finance (No.2) Act 2023 introduced defensive measures in relation to outbound payments of interest, royalties and distributions, including dividends, to jurisdictions on the EU list of non-co-operative jurisdictions for tax purposes and no-tax and zero-tax jurisdictions to counter aggressive tax planning. The passing of this legislation was listed as one of the four tax-related matters in Ireland's national recovery and resilience plan, NRRP, and was the final one to be completed. My Department subsequently notified the European Commission of the implementation of the reform. During its preliminary review of the legislation, a potential avoidance issue arose and an amendment was identified that would broaden the criteria whereby entities are considered to be associated with and, as such, inside the scope of defensive measures.

Section 12 provides for a technical amendment to extend the definition of "associated entities" to include entities that are associated by reference to the ownership or control by the same individuals, or individuals connected with those individuals, within the meaning of section 10 of the Taxes Consolidation Act 1997. This update to the legislation will ensure it operates as intended and future NRRP funding requests will not be hindered.

Deputies will also know that I introduced a financial resolution in April this year to extend the temporary reduction in VAT on gas and electricity charges. This was due to expire on 30 April and revert to the original 13.5% rate from 1 May.

The financial resolution extended the measure to 31 October 2025. The Bill provides the required legislative basis to underpin the financial resolution. As previously outlined, the estimated cost of this extension was €85 million. I will handle all VAT-related issues after that point as part of the normal budget process.

It is important for this Bill to be enacted before the summer recess. This is to ensure Revenue has enough time to implement the necessary IT changes to support the changes this Bill is making. It is also to ensure Revenue has enough time to contact the approximately 1.4 million property owners to advise them of their obligations in respect of evaluation. In light of the tight timelines for passing this Bill, I wrote to the Chair of the Joint Oireachtas Committee on Finance, Public Expenditure, Public Service Reform and Digitalisation, and the Taoiseach to ask for a waiver of pre-legislative scrutiny for this Bill. I thank the Chair for granting this waiver.

Together with my Government colleagues, I sought to deliver on our programme for Government commitments to ensure fairness and stability in local property tax, LPT, payments. By asking property owners to pay a small amount more, we project this will deliver an additional €45 million in yield for LPT which will go towards local services. It will give homeowners and local authorities stability and certainty regarding LPT for the next five years. I thank the Deputies for their attention to this Bill and I look forward to hearing their contributions across the evening.

Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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I dtús báire, regarding this legislation as well as a number of other pieces of legislation produced by the Government this week, there has been a protocol in this House that legislation is produced two weeks before it is brought before it in order to allow us and the public to look at that legislation, especially in the case where there is no pre-legislative scrutiny. In this instance, this Bill was produced last Thursday or Friday. The copyright Bill, which is coming up on Thursday, was produced on Friday. This affects all Deputies, not just me, in our ability to do our work. That time issue needs to be addressed.

This issue may have been flagged for years. Maybe the Minister will address that. In this instance, this is a cost-of-living measure because the Government is attacking those people who often cannot afford it. Someone owning their own home does not necessarily mean they have ready income or can afford this jump, even if it is only a modest or small amount, as the Minister has said. It may be a small amount if one stays within that threshold or band. The vast majority of homes in this city will jump substantially, however. They will jump up one, two and, in many instances, three bands. That is a huge increase for those people, especially for those who do not have additional funds or have already been hit hard by the cost-of-living crisis. The cost of fuel and food is substantially increasing, as is basically the cost of living in every way. The cost of material, if someone needs to fix up a home, has increased. In my area of Dublin 12, one of the auctioneers was boasting recently about the houses sold, although I am not giving out about the estate agents as they are only doing their job. For example, for anyone who knows Dublin 12 and Dublin City Council homes, a house on the Galteymore Road in Dublin 12 listed at €365,000 was sold for €490,000. That is an increase of more than 25% in the space of a year. It is not the only house advertised that is going that way. That is the scale of the jump. When the valuations happen, everyone in Dublin will be moved up two or three bands. That is the effect of it. While the Minister may say in his presentation that it will only be an extra €5 or €10, when you look at the bands, people will be jumping up quite a substantial amount. That is what people will be liable for.

Local authorities are not benefitting from this measure. They have never benefitted in this city. In the past, there was the equalisation fund where Dublin property owners paid - or deferred if they wished, but they ultimately paid - money which did not all go to Dublin City Council to provide services. In fact, it went to other councils throughout the country. The equalisation fund or system was gotten rid of. The increase has not happened since. The officials in Dublin City Council have been complaining continuously, even since the equalisation, that when the increase in funding comes, the grant from central government is reduced accordingly. It is hard luck if Dublin City Council receives an extra €20 million because the funds it will receive from the Government will be reduced by the same amount or more. That means the services it hoped to deliver from the property tax income cannot be delivered, particularly for houses, roads and community services. That is why the condition of some roads across the city is deteriorating and community services, and some positions which are vital to those services, are under threat. It is why Dublin City Council struggles to manage its budget when it comes to maintenance services. It does not have any additionality for the tenant in situ scheme. It does not have additional funding to deal with the shortfall from Government funding to purchase properties that are being advertised.

At this stage, or at any stage, this is a retrograde step. A different approach to taxation that does not include taxing the family home is needed.

Thomas Gould (Cork North-Central, Sinn Fein)
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For the people of my constituency of Cork North-Central, another property tax hike just represents an increased bill they have to pay in the middle of a cost-of-living crisis. In County Cork, according to a daft.ie report, house prices have increased by more than €75,000. That is not the fault of Cork City Council, Cork County Council, the people buying those houses or the tenants themselves. Rather, it is failed Government housing policy that has driven house prices to sky-high or record highs. The Government has not been able to get the supply right in housing. It has driven house prices up. The market is now running unchecked, charging whatever it wants.

There are people living in the family home who have no intention of selling. The value of their homes is that they are safe places to raise their families. It is their home. This Government is commoditising their home for money and not respecting what it is. In the eyes of the Government, the vulture funds and the big speculators and developers, housing is a commodity. We look at housing as being people's homes. That is the difference between the Government and Opposition sides of the House.

In County Cork, the local property tax is going to increase this year. People are paying this unfair tax but they cannot even get the local authorities to carry out work. This happens right across the State, not just in Cork. Footpaths need repairing and lighting needs to be upgraded and newly installed. Parks and playgrounds need work. We have no regional park on the north side of Cork city, none. Yet, people are paying the property tax.

To give an example, areas like Kerry Pike and Whitechurch have close to a 100% payment rate of the local property tax, but they cannot get investment in footpaths or lighting. Those people tell me they are working hard, have bought their own homes and have done everything right. When they turn to the local authority to look for money, however, it says it does not have the money because it is not getting enough funding from central government. There is an estate in Whitechurch called Castlewhite where the estate has not been taken charge of by the local authority. The residents are paying people to cut their grass and to maintain their green areas, even though the local authority should maintain it.

However, the local authority has not taken it into charge because it does not have the money to do it, so Cork County Council is doing a Pontius Pilot and washing its hands of the situation. Those residents are paying their local property tax and then double paying to have the work carried out. How can that be fair?

The Minister’s Government colleagues are blaming local authorities. The local authorities are the big bad wolf but the fact is - the Government never mentions it - that local authority funding was slashed after the financial crash of 2007 and 2008 and staffing levels and funding were never returned to where they should be. Government Members come in here and say local authorities should do this and that, but the local authorities have to produce balanced budgets every year, and if they do not have the income coming in from the local property tax, rates or housing rents, which are the only three forms of income for most local authorities, then they cannot provide the services that are required. Areas are crying out for parks and playgrounds that the local property tax should be paying for but it is not because local authorities do not have the funding to provide those. To make them the villain is wrong.

As Aengus said a minute ago, just because people have a house that has a value does not mean they have the ability to pay. There are areas I represent where people are living alone, they might be widows or widowers, and the value of the house might be one thing but they are living on the State pension, so any increase on them is another strike in the cost-of-living crisis.

I will conclude before my colleague contributes. I will give a terrible example. Tower is an area in my constituency where there is a bridge, called Tower Bridge, which has no pedestrian crossing and only one car can get across at a time. For years, people have been crying out for a pedestrian crossing, perhaps one hanging off the side of the bridge. Hundreds of thousands of euro have been collected in development charges but there is still no bridge so that children can get to and from school. They have one of the highest levels of local property tax in the State, yet the people of Tower cannot get footpaths, pedestrian crossings or the bridge that is needed.

We should be looking at properly funding local authorities but the Government has devastated those over the years.

Pearse Doherty (Donegal, Sinn Fein)
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Gabhaim buíochas leis an Leas-Cheann Comhairle as ucht an deis labhairt ar an ábhar seo. Cuireann muid in éadan na cánach maoine tithíochta seo. Tá muid ina éadan go huile is go hiomlán. Achan bhliain, léiríonn muid an dóigh le deireadh a chur leis an cháin seo. Is é an rud atá sa Bhille atá os comhair an Tí anocht ag teacht ó Fhianna Fáil, Fine Gael agus na Neamhspleáigh atá ag tabhairt tacaíochta don Rialtas ná go n-ardófar an cháin seo ar mhuintir na tíre. Níl aon teach sa tír seo a fheicfidh an cháin ag dul in ísle. Rachaidh sí in airde d’achan ceann acu. Tá gach ceann de na bands ag dul suas. De bharr go bhfuil an costas tithíochta ag dul in airde faoin Rialtas seo, beidh cuid acu á ndíol ag leibhéal níos airde.

Sinn Féin opposed the local property tax in every year, as the Minister well knows. We account for phasing out this local property tax. We present the Government with an alternative way of doing things and it rejects that every time. It is a way of scrapping the property tax without costing local authorities any revenue.

There is a fairer way to tax. Sinn Féin is committed to taxing wealth to reduce the burden on ordinary workers and families in delivering high-quality infrastructure and public services that are so badly needed right across our State. Despite the family home being turned into a financial asset by successive Fianna Fáil and Fine Gael Governments, the family home should not be treated in the way that it is by this Government in terms in wealth. For example, many of these homes have mortgages and some were in negative equity for many years, yet the Government looked at it as just simple wealth and an item that could be taxed. Sinn Féin believes in taxing wealth but one has to recognise that the family home has a particular position in the Irish State. It should be on net wealth that we tax, not tax where there are mortgages that are equivalent or similar to the amount of value that is in the property.

Some argue, as the Government has, that the way to tax wealth is to go after the family home. We completely disagree. Taxing real wealth is not easy but it is what we truly need. Lobbing a tax on the family home is just a simple cop-out and is what we have seen from Government after Government in recent years.

For many, it does not matter what the family home is worth because they are not selling it. It is a necessity of life. It is where they live and where they bring up their children. I need to be careful with my language here but just look at what Fianna Fáil and Fine Gael have done with the family home. It is like Trump looking at Gaza and he just sees real estate. The Minister looks at people's homes, the place where they bring up their families, and he asks how he can squeeze those families and how much money can he get out of them. That family does not care if their home was €200,000 five years ago and is now valued at €300,000 today. It is where they are raising their family and where they have scrimped and saved to be able to purchase or build the home in the first instance, yet the Government just sees it as a cash cow to be taxed. Under this proposal, every single house in the State will end up paying more tax.

The reality is this Government has pushed us in a direction of the financialisation and commoditisation of homes. It has taken what is a necessity - what should be a right - and transformed it into an asset and made it out with winners and losers. Its failed housing policy has pushed up prices higher and higher right across the State. That has not been to the benefit of ordinary workers who just want a home to live in, but of the Government’s friends who keep it in high places. It has benefited the developers, bankers and investment funds, and the Government’s answer is to tax ordinary workers every single time. The irony is not lost on those workers that, on the day the Minister has announced that every house in the State will have to pay more tax, be it €500 or €250, it makes no difference, he has also announced he is giving bankers bonuses and bumper salaries. That is what this Government stands for. For the family that lives beside me in west Donegal or the family that lives beside Deputy Gould down in Cork who are scrimping and saving and going to the credit union to try to pay for the recent bills, such as the electricity bill, the Minister has just handed them a higher bill on their property. And what has he handed the CEOs of the banks in this State? He has handed them bonuses – pay that now goes above €500,000 – and in doing so he has lost the State €5 billion. Never has a finance Minister in all my time lost so much money for the State. If he had just held onto the shares in AIB, we would be €5 billion better off today. Oh my God, that has happened under prudent Paschal, the fellow who will not give the increases we need for disability payments, special needs allowances or those who needed the additional support of one-off energy credits this winter, but when it comes to bankers’ bonuses, it is a case of “Come knock on my door, it is a free for all”. That is what Fine Gael does, definitely when it has Fianna Fáil in government with it.

We are in the middle of a cost-of-living crisis. People are struggling to put or keep a roof over their heads. People are struggling with the cost of childcare. The Government promised that, within its first 100 days, it would provide a roadmap for delivering €10-a-day childcare, which is another promise it has failed to deliver. People are screwed over by high energy bills, among the highest in Europe, and the Government sits idly by, yet its priority is to make sure every single home pays a bit more local property tax. There is simply no let up for people.

The Government will tell us it can do nothing about inflation but it forgets to say that it is going to raise the cost of local property tax, petrol, diesel, home heating oil and gas because the Government controls a lot of prices in this State. This is another example of how it is screwing people over again royally. What we should be doing is abolishing local property tax and not increasing it, regardless of whether that increase is €5 or €250. That is what is required in this legislation. We will table an amendment to bring that about.

The Minister spoke about revaluation. You would swear he was doing us a favour here and trying to soften the cough because of the revaluation. The revaluation in the local property tax is a political choice by the Government. It does not need to happen. The revaluation does not need to happen and we should not have it in the first place.

We should abolish this tax. It reflects the failures of Government in respect of housing policy.

Let us look at the numbers. The Minister told us the revaluation will happen in November this year. However, he said that until last year house prices had increased by 23%. They are still increasing, by the way. Therefore, by the time the revaluation takes place, prices will be above that threshold. In Donegal, prices have increased by 35%, but the bands only increased by 20%, because the Minister needs his little squeeze on households. The Government needs to squeeze householders a little bit more, while the bankers get bonuses and pay of over half a million euro because that is what Fianna Fáil and Fine Gael Governments do.

I will hand it to the two parties; they are bloody consistent. When it comes the buddy móra in this country, there is always a nice listening ear. Last week, I asked the Minister's party leader if he does not listen to the people who are struggling and find it difficult to pay for a basket of groceries at the end of the week. Does the Minister not listen to the families who are crippled with a second mortgage in childcare costs or are screwed over by petrol and diesel prices and the carbon taxes that increase every year and which the Government plans to increase further? The Government then comes along with a proposal that increases taxes.

The Minister can dress this up all he wants. The reality is that the local property tax for a person in my county relates to a property worth €190,000 in 2021. Property values in Donegal have increased by 30% since that time. The current price is €247,000. People in Donegal will pay another €140, not another €5, in property tax. That is what the Government is delivering to people in my constituency. It is absolutely wrong in the middle of a cost-of-living crisis and, indeed, at any time. We should abolish the local property tax. That is what Sinn Féin is committed to and will do. That is the type of amendment we will bring forward to the Bill.

Gerald Nash (Louth, Labour)
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The Labour Party will amend the Bill on Committee Stage. I can assure the House that we will not amend it on the basis that we want to see what is a modest charge on properties abolished. It is extraordinary that every time we debate the principle of the property tax in this House there are parties who purport to be on the left in Irish politics which say they oppose it. They oppose it for their own reasons, and I respect that. In my view, parties are not entitled to refer to themselves as a social democratic or socialist party if they do not agree with the principles of taxes on assets. This is a modest charge. Few people like paying tax, but people are compliant. They understand the necessity of the tax and it is now an embedded feature of our political and tax-raising systems in this country.

I am always struck by the uneasy alliance of the far left, Sinn Féin and parties which describe themselves as being on the right in Irish politics, such as the likes of Independent Ireland, where people seem to agree that property taxes are something that should be abolished but rarely make sound proposals in terms of how we should replace the several hundred million euro on which we rely every year to run our local services.

It speaks to the heart of the report published a couple of short years ago by the Commission on Taxation and Welfare. It said that taxation from property and wealth is low and should increase. We know that some of the most significant forms of wealth in this country are held in property. The commission recommended that the yield from capital gains tax, capital acquisitions tax and taxes on land and property should be substantially increased. The commission also recommended a site value tax be applied to all land not subject to the local property tax. This measure was also in the Labour Party's election manifesto, but it is one this Government is yet to move on.

A site value tax as a replacement for the outdated system of commercial rates ought to be up for consideration. The commercial rates system is full of inequities and is, quite frankly, an anachronism in the context of a modern economy. The idea of a site value tax would, of course, require detailed consultation on the design and modelling of the interaction with the local property tax and residential zoned land tax.

The commission was clear on the local property tax. It called the local property tax a well-functioning tax, the yield from which should be increased materially. The commission also recommended that tax incentives should not be used in order to stimulate the supply of housing, another thing this Government seems to have contrasting views on.

I am reassured by comments made by the Minister in previous months that tax incentives in respect of the supply of housing are something that ought not to be considered. I hope that is something he will follow through on. We remember all too well the impact such forms of incentives, as they were described, had on our economy and banking system. They led, for example, to the financial crash. The commission recommended that the overall yield from wealth and capital taxes, including property, land, capital acquisition and capital gains taxes, should increase materially as a proportion of overall tax revenues. Herein lies our issue with the Bill.

We agree that working families in average family homes who are already being impacted by the cost-of-living crisis should be saved from very large hikes in their local property taxes as a consequence of rising property prices. We absolutely get the point. While the ability to pay must always be at the forefront of any tax raising system, it is clear that this country does poorly in terms of taxes on fixed assets and capital. The Bill will not do a huge amount to improve that record.

The Labour Party's issue with the Bill is with how it operates at the higher end of the scale, where there is scope for even higher yields from wealthy property owners with a demonstrably greater ability to pay. Property values go all the way up to €1.75 million before they are taxed on their actual value. Even then, the same rate is applied as any other property for the first €1.05 million of that total value. The remainder is taxed at 0.25% and 0.3%. It is fair to say that people in that category with very large assets at the high end of the spectrum are also likely to be cash rich. Wealthy asset holders get away lightly in our tax regime comparatively, while ordinary working people carry a significant load.

The local property tax is an opportunity to address that balance and use the increased yield from those with abundant resources to give working people a break, whether by using the resources we have to reduce the cost of living and invest more in public services or, over time, reduce the proportion of tax that working people pay.

A second and equally important issue we have to keep an eye on when we look to reform the local property tax is the funding of our local authorities. The Labour Party welcomes the broadening in the Bill of the discretion available to local authorities in the setting of the local property tax from 15% to 25%. This was a commitment we made in our election manifesto late last year. However, this expansion of local authority discretion, as I understand it from the remarks of the Minister, will be delayed until 2027. For this to mean anything, the Government parties, that is, Fianna Fáil and Fine Gael need to tell their council members around the country to exercise this power positively for the betterment of their local authorities and the people they serve.

It has been the experience across the country that, more often than not, representatives of Government parties in local authorities are not prepared to increase the property tax to provide additional resources to fund public services in an area or, in fact, want to reduce the local property tax. Too many times, this has led Labour Party councillors, working with Green Party, independent or Social Democrats councillors, to argue against this situation.

We also have to be careful that the core yield of the tax is not undermined to such a degree that the extra discretion makes no real difference to the funding of local authorities. We should all aim to ensure that the financial independence of local authorities in Ireland is strengthened.

A key principle of local government reform must be that councillors have greater control of their finances and more discretion for local priorities, alongside the power to raise revenue. We should also consider introducing a legal guarantee that all of the local property tax raised in a local authority is retained there, independent of other revenue streams, including from Government, and ensure that decisions of the local property tax are made at the same time as the annual council budget.

We also believe we should be providing more revenue-raising powers and more discretion to local authorities to raise revenue along the lines, for example, of proposed tourist levies, a better way of collecting vacant and derelict site taxes and increasing the discretionary level of the local property tax.

While we are looking at local authority finances, the resources generated and raised from the imposition and collection of derelict site levies ought to be improved. One way of doing this would be to pursue an approach I have been proposing for many years, which is to give the powers that local authorities have at present to collect revenue from derelict sites levies to the Revenue Commissioners. The Revenue Commissioners would then be obliged to funnel those resources directly back to the local authorities. At present, property developers and property owners who can afford to leave their sites derelict, whereby those sites appear on derelict site registers, are not taking the responsibility seriously. All too often, they are deliberately evasive when the bills hit the mat and they are simply not paying the levies. As I understand it, if the Revenue Commissioners were to collect properly all of the derelict site levies that would be available, the yield would amount to €24 million or €25 million. This is not an insignificant amount of money. The resources being collected at present are exceptionally small.

The most recent figures for LPT were published by Revenue in April 2025. They showed that for the LPT year 2025 to date, Revenue has engaged with more than 1.4 million property owners in respect of 2.02 million properties, representing a 97% return compliance rate, and €346 million has been collected to date. I will not argue for one minute that this form of taxation or any other form of taxation is popular but compliance is high and compliance is important. One of the reasons compliance is high is that the local property tax is collected by the Revenue Commissioners. Therein lies my argument for giving responsibility for the collection of the derelict sites levy to the Revenue Commissioners.

According to the Central Statistics Office, property prices increased by a national average of 24% between November 2021 and March 2025. Property prices have had a greater proportional increase outside of Dublin, with more than 30% property price growth recorded in the Border, midlands and western regions. However, average property prices in Dublin for all types of residential properties also increased by 18%. While these increases will have little or no impact on the resources available to families simply living out their lives in an average family home with no desire to sell, they are a huge boon for those wealthy property owners and property flippers who see the property market as a ladder, with rungs on which to climb and, hopefully, seeing their asset appreciate always over time. While we need to protect the first group from major hikes in the local property tax, the second group does not need this protection and, in my view, can afford to contribute more.

The Government estimates that 96% of property owners will stay in their existing bands as a result of the Bill and it will yield an extra 8% in revenue over a period when property values have risen by one quarter. In my view, all of this means we have a missed opportunity to take a greater yield from those who will ultimately profit from the boom in property prices and use that extra revenue to give ordinary working people a well-earned break.

There is some consolation in the Bill for working families and their struggles with the cost of living. The Labour Party welcomes the extension of the 9% VAT rate on energy bills but, at the same time, we continue to make the case for a greater tax take from the runaway profits of some of the energy companies that are still posting supernormal profits. Moving the threshold for deferrals of tax in line with inflation is also a welcome element of the Bill from the Labour Party's point of view. This is fair and we look forward to amending the legislation on Committee Stage when it appears before us.

Barry Ward (Dún Laoghaire, Fine Gael)
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Broadly speaking, LPT is a good thing. When it was introduced I welcomed the fact that it was part of a model to allow local authorities throughout the country to become self-financing and self-supporting. However, I have significant problems with the way it was put together and what the Bill does. In the first instance, local property tax was established to make local authorities self-funding. In reality, it has not achieved this to any substantial extent. I come from a background of 11 years on Dún Laoghaire-Rathdown County Council, the local authority area in which the highest rates of local property tax are paid in the country.

There is, of course, a perception out there, and I know it gives some people great glee to suggest, that Dún Laoghaire-Rathdown County Council is a very wealthy local authority. In fact, this is not the case. The vast majority of funding for local government comes from commercial rates. We do not have a substantial commercial rates base in Dún Laoghaire-Rathdown. We are by some distance the poorest local authority in Dublin and compare with county councils throughout the country rather than our bigger brothers and sisters in Dublin. The annual budget for Dún Laoghaire-Rathdown County Council is approximately €280 million or €290 million. Dublin City Council's budget is more than €1.2 billion.

Looking at our commercial rates base, which is a little over €50 million per annum, Fingal County Council takes more than €80 million from Dublin Airport alone, just one ratepayer in its area. South Dublin County Council has a large commercial hinterland around the M50 which generates massive commercial rates for it. In this instance, we are looking at a local authority where local property tax costs its residents large amounts that benefit the council little enough because it is not a very populous area, and it ends up being a relatively poor local authority.

In 2012, when this was put together in anticipation of the Local Government Reform Act 2014, the idea was always that local authorities would have the right to vary the property tax up or down by 15%, according to their needs or whatever way they chose to interpret it. Notwithstanding the fact this right was given to local authorities, and notwithstanding that it was always anticipated that local authorities such as Dún Laoghaire-Rathdown County Council would be able to reduce the burden on their residents, and that other local authorities where property prices were lower, particularly small rural counties, could increase it correspondingly to benefit the coffers of the county council, there has been implicit and explicit criticisms - explicit in this Chamber in the course of this debate - of those local authorities that choose to recognise the fact their residents pay more than they need to, or more than they should, in the context of their earning capacity, when those local authorities reduce the property tax accordingly. Not only this but there have been consequences for those local authorities with regard to central Exchequer funding, which is cut because they are seen to have not played ball by reducing the local property tax when, in fact, the entire system is apparently designed to allow them to do this.

When I look at Dún Laoghaire-Rathdown County Council this is exactly the problem. When I was on the council we consistently reduced it by 15% because it was the fair and reasonable thing to do. Our residents, the people who live in Dún Laoghaire-Rathdown, pay vastly more than somebody in the Offaly, Carlow and Longford county council areas, in fact, more than somebody in any other local authority area we could pick around the country. They are disproportionately penalised. Now we have a situation where, notwithstanding the significant increase in house prices of 25% over recent years, notwithstanding the fact the Government is doing its damnedest to prevent those increases in costs, and notwithstanding the fact there is a clear public policy objective of not having property prices continue to rise or continuing to rise at the current rate, we now have a situation where the Bill will specifically penalise those householders who may not have traded property, are not flipping property and are not wealthy people but who have a house that is of a particular value. They will now have a greater property tax burden.

For one stream this is fine if they can pay it but what happens to the elderly retired person who has a fixed income? We know that person's income has not gone up by 25% in recent years. What happens to a person in a job where their pay has not substantially increased? Their local property tax bill will increase. The Minister might well respond by stating most people will stay within their band or that where there is an increase, it will be double digits. That is fine but what happens if somebody inherits a family home in an area where property prices are substantial? Their bill will substantially increase because the property is valuable. The reality is that it does not reflect their ability to pay the bill. It does not reflect that there may be no change in their circumstances.

I understand the rationale behind LPT and I am in favour of it as a notion. The way we do it through the 2012 Act and this amending legislation is blunt and unnuanced. It does not reflect people's ability to pay. It does not reflect the disparity in property prices throughout the country. It does not acknowledge the fact that if you are a renter or local authority tenant, you have no liability. Beyond that, a local authority such as Dún Laoghaire-Rathdown County Council also has to pay the local property tax for social housing in the county. In addition to the individual burdens being placed on individual households, the Bill will also further disadvantage local authorities such as Dún Laoghaire-Rathdown County Council because they will have a bigger local property tax bill to pay with regard to their social houses.

When we are pushing those local authorities to build more social houses and acquire social houses - an area in which Dún Laoghaire-Rathdown has performed well - they now get a further smack in the face in this Bill regarding their outgoings for local property tax. Could we not look at local property tax with a more reasoned, fairer eye that actually reflects the ability of the people involved to pay those taxes?

Peter Cleere (Carlow-Kilkenny, Fianna Fail)
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Fianna Fáil supports the Bill, which will provide for a new method of calculating the local property tax liabilities in advance of the new valuation period set to commence in 2026. The proposed changes to local property tax will mean that most homeowners will remain in their present valuation bands, which is to be welcomed. Base local property tax charges will increase a small amount in proportion to property values. A small number of properties will pay a larger amount than before, either as a result of moving valuation band or due to their existing high value.

What I am most pleased about in this particular proposal is that the next valuation period will last for a period of five years. This will give certainty to homeowners throughout the country, including in my constituency of Carlow-Kilkenny. The income thresholds for deferral of local property tax will be adjusted to account for inflation, wage growth and increases in State payments since 2021. This decision follows a recommendation made by the 2019 review group on local property tax. The existing thresholds will increase by between 30% and 40%, depending on personal status and whether the threshold is in respect of full or partial deferral. Additionally, a change has been made to the local adjustment factor, which allows local authorities to vary the amount of local property tax collected in their area.

I listened to previous speakers, particularly Sinn Féin Members on the Opposition benches. Sinn Féin has opposed property tax every single year since its inception. I note that Sinn Féin is very heavily represented on the Opposition benches this evening because it cares so much about the local property tax-----

Máire Devine (Dublin South Central, Sinn Fein)
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You can talk.

Peter Cleere (Carlow-Kilkenny, Fianna Fail)
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I was a councillor on Kilkenny County Council for ten years. Kilkenny County Council increased its property tax by 15%. The benefits that came to every single community in the county were unbelievable. Footpaths were upgraded and additional lighting was put in. There was investment in playgrounds and remedial grants, which went from €34,000 to €200,000. Each council had a discretionary fund which it could allocate to its communities. That 15% allocation increase to local property tax made a difference to the people I represent in every single community in my constituency and in County Kilkenny. It is important that this is noted.

While Sinn Féin has opposed every single property tax amendment that was brought forward in Kilkenny County Council and actually proposed to reduce the property tax by 15%, it never once-----

Máire Devine (Dublin South Central, Sinn Fein)
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Jesus.

Peter Cleere (Carlow-Kilkenny, Fianna Fail)
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-----came up with a concrete proposal as to how it was going to do this. Not once did Sinn Féin say which playgrounds it would shut down, which roads it was not going to fund, which libraries it was going to close or which community groups that get amenity grants in the constituency were going to lose funding as a result. All we are hearing from Sinn Féin is soundbite after soundbite. I will not sit here and take lectures from Sinn Féin on its economic policy. This Government does not have bags of sterling lying around. As a country, we have to make sure that each local authority has the opportunity, ability and capacity to make sure it is doing right by its county. The councillors in local authorities do a fantastic job, particularly in Kilkenny which I represent. They do what is right for their county and make sure many different projects in the constituency get looked after.

I want to make a couple of specific points regarding the property tax, one of which is regarding the revised method for calculating local property tax liabilities, with the upcoming valuation period lasting for five years. I mentioned this, but it is really important that we can give certainty and clarity to every single constituent that the proposed local property tax regime will stay in place for a period of five years. Notwithstanding that, local authorities have the opportunity to increase or decrease their local property tax band. I welcome that there is more scope given to local authorities and that each local authority will continue to have the option to either reduce it by 15%, if that is what the local authority feels is the right thing to do for its residents, or increase it by 25%, which would mean even more funding would be pumped back into the local communities. Each local authority is best placed to decide what would best suit its particular county or municipal district.

The widening of all valuation bands by 20% was mentioned. I would like to see the bands potentially increase a bit more to 25% or 30% if possible. The increase by €5 in the band 1 charge to €95 and the increase by €10 in the band 2 charge to €235 per annum are minimal. When we increased the local property tax in Kilkenny by 15% a number of years ago, concerns were raised by some people, but when they saw the benefit of what was being pumped back into the community, it was most welcome. When one can see the difference it makes on the ground, it is huge. The additional revenue gathered from the local property tax in each local authority goes to funding local services, community development through reinvestment in communities, amenity grants, festival grants and infrastructure improvement. Kilkenny was able to get way more roads done as a result of the local property tax. Way more footpaths were upgraded and more additional lighting was done in towns and villages throughout county, in places such as Graiguenamanagh, Thomastown and Callan. Many local parks, playgrounds and recreational facilities are funded through the local property tax. It makes a huge difference.

In addition, local property tax revenue can be used to promote business development and tourism. Kilkenny is the festival capital of Ireland. We are so proud of that. Every single weekend we have a festival of stature and note. Part of that is funded through the local property tax, as are library and cultural services. Schemes such as the painted town scheme help businesses. Local property tax is here to stay, but each local authority has to retain the right to do what is right for its particular county, rather than taking a one-size-fits-all approach.

Sinéad Gibney (Dublin Rathdown, Social Democrats)
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While certain aspects of this Bill are welcome, such as the exemption adjustments and consideration for homes with defective blocks, it fundamentally fails to address some of the issues at the core of our local property tax system. These are issues that have long been raised by the Social Democrats. Our cofounder, Catherine Murphy, highlighted these issues from the outset. We would like to welcome it as a progressive tax. We support the local property tax and the protection of the tax base. This is something we campaigned on in the last election. We do not hide the fact that we support the protection and expansion of our core tax base. This should be a progressive tax as a tax on assets but, unfortunately, it is diminished because the system itself is so fundamentally flawed.

It is unfortunate that pre-legislative scrutiny has not been facilitated for this Bill. I appreciate the timeline that is being dealt with, but I believe a shorter pre-legislative scrutiny process could have been facilitated rather than the full eight weeks.

In his opening comments, the Minister said these changes were "fair and progressive". Unfortunately, the system itself is not fair. I would go as far as to say that some of the changes proposed here are not fair or progressive at all. The two issues I want to focus on are decentralisation and disincentivisation. Ireland is one of the most centralised countries in Europe. The local property tax was meant to address this, but the way it has been set up means it has made little progress in giving local government more autonomy.

A 2023 report from the Congress of Local and Regional Authorities of the Council of Europe found that Ireland was compliant in only eight out of 20 principles of the European Charter of Local Self-Government. The report states "there is still a lot to be done before local self-government in Ireland is on par with other European countries." Ireland was found to have one of the lowest scores under the local autonomy index, with Irish local government scoring a rank just above Hungary, the Russian Federation and Moldova. Some of the key concerns highlighted in the report include limited democratic decision-making powers, where Irish local authorities have limited powers, leading to a democratic deficit due to the "imbalance" between elected councillors and chief executives. Another concern was the insufficient financial resources and autonomy, where local authorities face financial constraints that hinder their ability to provide essential services, with limited discretionary financial resources identified as a key obstacle. The report also noted the centralised local government system. The report states that despite some functions having been "transferred to local authorities", they do not manage "a substantial share of public affairs", indicating non-compliance with the "principle of subsidiarity", which requires decisions to be made at the local level.

A paragraph I will read from the conclusion of that report is quite bleak. It reads:

When the monitoring delegation visited the Custom House in Dublin, where the Department of Housing, Local Government and Heritage resides, it was informed that "local government had been administered and supported from this house for 200 years". The house was used by the British as the location where local government in Ireland was controlled, but after independence also by the Irish central authorities. This was a telling way of expressing how central government views local government - something that is administered and not primarily regarded as self-governing units.

This same picture is reflected in the figures regarding taxes and expenditure. Eurostat collects data on the proportion of taxes raised and the amount of public spending by each level of Government each year. Ireland sits in second last position on both counts, just above Malta. More than 95% of tax revenues are raised by central Government and 93% of public spending is disbursed by central government in Ireland. This is the opposite of countries like Finland, Austria and Denmark. It is important to highlight all those countries happen to have some of the best housing systems in Europe while Ireland has one of the worst. This is a good indicator of the impact centralisation has.

With regard to the wider democratic considerations of that centralised model we have here in Ireland, it is not just limited to local property tax; it is a wider issue in our local government. It is not news that we have a severe democratic deficit in our local authorities. We must not only support councils with funding but also ensure the system empowers our democratically elected councillors. When we afford them so few ways to meaningfully impact the funding of the councils and the decisions on what the councils do, we open the door for people to resent democracy and lose faith in public representatives and the State itself.

The other element of this I wish to speak to is the disincentivisation created within the system itself. Local authorities with a surplus are still only permitted to keep 22.5% of their local property tax yield to spend at their own discretion. A council that collects a significant amount of local property tax to fund its activities does not reap the benefits. Those living in those areas do not see the benefits of the money being taken out of their pockets, or being put towards their communities in a significant way. All of us hear our constituents ask, "What am I getting for my local property tax?" Unfortunately, it is a question most of us really grapple with answering.

This tax can work and empower councils to make our communities better but the system is set up to breed resentment and a sense of futility. The more local property tax collected, the more central government funding is reduced. This means people cannot see the benefit of their local property tax.

Regarding local impact, one of the few things our democratically elected councillors can do is increase the budget of their councils but this system incentivises them to lower it, narrow our tax base and have less guaranteed funding for our communities. When an increase to council revenue does not increase the money available to maintain their communities and support their lives, people resent the collection of local property tax. Of course, councillors will be incentivised to lower it and undermine what little additional budget it will afford us. When the council has too much of a surplus, it must go back to central government.

The marginal increase in base levels is welcome but if we do not tackle the structure of how local Government is funded, none of this will work. We continue to tie local government's hand and purse strings and we will therefore continue to see people dealing with these most basic issues at a local level. We already see litter, lack of maintenance of paths, lack of community spaces and lack of services all due to a lack of funding.

I will mention briefly - and this is something we may pursue as an amendment on Committee Stage - the disproportionate element of this. This is something that was raised by one of our former councillors who tried to deal with it on a voucher basis. Essentially, what he called out was that the current 15% discount is applied in such a way as to benefit property owners with higher value properties. The net discount they are afforded is much higher. We would like to explore the idea that any discount voted by council should be directed towards lower property bands, or tied in some way to the average or make those people on the lower bands benefit more from the potential 15% discount than those in the higher bands. This is a disproportionate piece which removes the progressive nature of such a tax that is asset-based and instead puts it into the regressive category of taxes in the State.

As I said at the outset, there are parts of this Bill which we welcome but, unfortunately, at present, it is problematic in respect of those issues regarding the fundamental flaws in the system, maintaining that decentralisation, disincentivising and tying people into tax bands. I spoke to a colleague just before I came here who told me his band has not changed for nine years. The property market prices have changed significantly over time and probably nearly doubled in his particular case. This is a problematic spiralling of house prices and Government mitigating that in this fixed band issue within the band system.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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I listened carefully all contributions but to one in particular. Deputy Gould certainly struck a note with me in his description of local authority and local government, the spending of money and the delivery for constituents. He was right; we need to do something to adjust the balance in favour of the people we represent.

I also listened to another contribution. We all get these briefs but to come in here to read them out word for word and not have your own view on things does not say much about democracy or showing leadership. Members have made contributions and pointed to the benefits of the local spend and how the councils benefit our local communities but there is another side of the story. Last night in Kilkenny, there was a meeting about a road in south Kilkenny, which goes through Waterford, Kilkenny and on into Wexford. It is the most dangerous stretch of road in the country and is recognised as such. The local people - there were 400 or 500 at the meeting - wanted a number of things immediately. They wanted to see Garda presence increased along that stretch of road, with the appropriate cameras in place and visibility which would clearly show the driver they are entering a dangerous area that is has speed cameras and is being monitored. They asked for specific improvements, such as the cutting back of ditches, provision of a fence, fixing potholes and some realignment here and there. They asked for some speed in the delivery of the necessary works to make the N25 fit for purpose and to take the dangers away, which would all be funded by TII and Government. They were aghast to hear the presence of extra gardaí at that point on the road would be subject to constraints, with relevance to how the number of gardaí were being deployed around that area. The specific improvements the community asked for could easily be carried out, costed and done but that is subject to approval by the council and TII and funding is an issue. They then moved onto the bigger TII project and the delivery of that motorway as fit for purpose. They were told this was also subject to finance. In 2021 and 2022, when the finance should have been delivered to that community to get the project under way, in terms of TII, the Government failed to deliver the money because it was dancing to a greener tune at that time. This has now passed and we are into a new regime.

To ensure he builds confidence with a community like that in south Kilkenny, the Minister needs to bring forward the €200 million or so that has been promised for next year.

The Government needs to set it on course, to get delivery of the project to restore safety and to ensure nobody else dies on this road. A significant number of people have died on it. The Government needs to fast-track the delivery of the planning process, so that the bigger project is delivered. Relevant to this debate, the Government needs to make money available to carry out the improvement works that are essential now as a result of the fact that the road will not be delivered for eight years. It also must make sure that An Garda Síochána is well funded and well resourced to provide the safety that the community has demanded. That is relevant to this tax because people are looking at it - with local problems to the fore - and are not seeing the county council spend the money collected on the works they require to have safety restored in their community. That is a big issue, particularly as the Government is collecting a significant amount of money by means of this tax.

The Minister stated that an extra €45 million will be collected. I want him to look at how local authorities spend money that is collected. A considerable amount of it is wasted. There are benefits, including those enjoyed by communities and local projects are achieved. However, the value obtained in respect of this money is not being monitored. I have tried time and again to get the Government to introduce a Bill that would make the Comptroller and Auditor General responsible for the local authority audit. I want to see that happen.

In the context of the Bill, I want elderly people who own their homes, who are living in their homes and who have been affected by the increase in the value of their homes looked after. Even though some of those homes may have doubled in value, it does not mean that those who live in them will have the money to pay the new amounts that will be demanded every year. Nobody is interested in looking at that.

Revenue has a great collection rate. It is either 93% or 97%. How many people are we pushing further into poverty because they cannot pay their bills today? How many are pushing the payment of their bills to a later date? How many are living in fear because they think someone is going to come to take their house or cause them difficulties simply because they do not understand their circumstances? The Revenue Commissioners have offices in Kilkenny, Waterford and many other localities. However, they do not have staff available in their public offices to explain this tax to the people to whom I refer. They should be made to man those offices, provide a public service and explain to people what this tax is all about, particularly those who are not computer literate and cannot make their returns. These people should be assisted to understand what is meant by the word "deferral" or the fact that they can pay in instalments. The Revenue Commissioners need to come to the table on this. It is not good enough that they are being allowed to screw householders, collect 97% of the money and have total disregard for how those in a household might be feeling hard pressed in the context of putting food on the table or looking after the other bills they have to pay.

People are still living in fear that the vulture funds will come and take their homes. Others fear that the banks will come and take their homes. Some of those vulture funds are not even taxed to the extent that they should be. Why not take the money from them? Why not take the money from the banks? The Government could then ensure, as it applies a reasonable property tax, that local authorities come up with a clear proposal to show how this money is being spent. The Government is putting the onus on local authority members to raise property tax because, no doubt, there will be plenty of chief executives who will want to do just that. They will be encouraging the members to do it now because we are so far out from an election. That is when the substantial increase is brought in. I rail against that because I want to protect those who are less well off, those who are suffering the consequences of this increase in terms of the bands and those poor people who are having to pay more and cannot meet their day-to-day needs. It is absolutely essential that the piece relating to the Revenue is put in place.

It is essential that where we see a scheme like that relating to the N25 in south Kilkenny that needs money now, the Government has an obligation to keep people safe, to reach out and to ensure that whatever the chief executive of Kilkenny County Council asks for is provided on the basis of a legitimate plan that will deliver safety and save lives. I do not see anything wrong in asking for that. I do not see anything wrong in putting the case to the Minister in respect of the changes that are absolutely necessary. What we are doing here again is picking the low-hanging fruit. We are insisting on taxing people because we know where they live, which means that we can apply the tax. What about all the companies here, there and everywhere that are paying nothing? Some of these companies are offshore or are not subject to the tax system here. We have to do more about them.

How much smaller would the increases be if we were determined to root out the outrageous overspending on projects in this country? How much money could we save? How much hardship could we prevent for the people we represent by spending that money in a more co-ordinated and strategic way to help those in society who are less well off? We are happy to proceed on the basis that we know where people live and to tax them as a result. Those who cannot be caught too easily get away with it. The system that spends or even misspends a fortune can get away with it. Successive Governments have looked on, sat on their hands, and done nothing to reform the system. What we should be talking about here is reforming the system, protecting the underprivileged and those who have nothing and making sure that those who have money pay in buckets.

Ann Graves (Dublin Fingal East, Sinn Fein)
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The local property tax is an unjust tax on the family home. It should never have been introduced. A home should never have been turned into a financial asset. It should be treated, not as a source of wealth but as a necessity. The original household charge was brought in during the crash when the troika came to town. Like many other measures from the time of austerity, it was supposed to have been temporary. Unfortunately, for struggling families, it has remained part of Government policy and has become part of the cost-of-living crisis for many working families. Pensioners and single parents are expected to pay the same tax as millionaires, simply because they have the same postcode.

Sinn Féin has been consistent in its opposition to this regressive tax. As a councillor on Fingal County Council, every year I tabled a motion looking for the full 15% allowable rate reduction, while also arguing that the LPT should have been abolished. Unfortunately, the ruling group in Fingal County Council, including Fianna Fáil, Fine Gael, the Labour Party and some Independents, did not support this. In government, Sinn Féin would abolish the property tax and replace it with direct funding for local authorities. We would phase out this unjust tax and we have always accounted for this move in our alternative budgets. We are committed to taxing wealth in order to reduce the burden on ordinary workers and to using this money to deliver quality infrastructure and local government services.

This Bill provides for local authorities to vary the property tax upwards by 25%. On paper, that appears to be beneficial to the local authorities. If a council decides to increase the home tax by 25%, it does not get to keep and spend the extra revenue raised. This funding remains only a small fraction of the overall council budget. Local authorities are starved of funding and no amount of tinkering with the property tax is going to change that reality. One of the central faults of the property tax is there is no ability-to-pay clause, which is very punitive for those on social welfare or low incomes. People can defer the payment of the local property tax if they meet certain criteria, but this is not an exemption and the bill eventually has to be paid, with interest.

According to the Central Statistics Office, property prices have increased by a national average of 23% since November 2021. People's incomes have not risen at the same pace, however. I will give some examples from Fingal. The average price of a house in 2021 was €320,000. Today, it is €445,000. That is the increase over four years. Properties for sale in a new development in Swords went on the market last week. A two-bedroom terraced property costs €485,000 and a three-bedroom semi-detached house is €595,000. That is absolutely shocking. It puts buying a house out of the reach of young couples and the average family.

Ultimately, the aim of this Bill is to raise an additional €45 million through the local property tax. We will continue to oppose increases in the local property tax at council level until we are in a position to reduce this household charge to the rubbish bin of history. We will call on other parties to support us.

Brian Stanley (Laois, Independent)
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I will comment in due course on the Finance (Local Property Tax and Other Provisions) (Amendment) Bill 2025. The Bill is obviously being brought forward to raise more money. I wish to raise a couple of points to provide context.

The abolition of rates by Fianna Fáil in 1977 completely removed a sustainable source of funding for local government. While the election that year was won on the back of this move - in fact it was a landslide victory - not long after, the incoming Government increased taxes. I remember at the time watching my pay packet evaporate. The shortfall was made up by heaping more tax on top of workers. That was not the way to go. While there was a short-term benefit for the then Government in getting into power. Having power and control over taxation, it leaned harder on ordinary workers. Not having control of finance completely impedes the role of councillors and what they are supposed to do in performing their functions. Taking away the rates base in 1977 completely undermined local democracy.

There are a number of issues with the local property tax, including the fact that there is a lack of transparency as to how it is spent and allocated. Within local councils, the management take the lead in terms of how the money is divvied out. They tell councillors what they can and cannot do and why money must be put into this or that area. There is a certain amount of arm-twisting in terms of getting budgets through. In reality, councillors have very little say in the matter.

The other big problem with the LPT is the means of property owners. LPT, as it was introduced in 2012 and 2013, takes no account whatsoever of the income of the property owner. Somebody could be living in a house worth €500,000, €600,000 or €700,000, but they might be on a single State pension. For example, a widow or widower could be living on a State pension and have very little disposable cash to use to pay the tax.

In County Laois last year, it was projected that there could be a possibility of raising €11.6 million via LPT. However, the total amount realised was €3.1 million. Residents must be told more clearly what they get in return. That is a real issue. We must remember that in many cases, people who own their own houses have already paid stamp duty and are paying high mortgages. In some cases, the LPT turns out to be a tax on debt. People still have to fork out for services, such as refuse collection, that were privatised. More and more families are having to dig deep into their pockets to fund the running of schools. I refer to just the basics such as keeping the lights on, the heating going, and basic work required in the school. That is what is happening throughout the country. At the moment, a lot of schools have overdrafts. INTO representatives told me and others here last week that a substantial number of schools are running into the red. That is not sustainable in the long term, and it must be addressed in the budget. There was a very modest increase in the capitation grant last year but it is still way behind what it needs to be for primary schools. That must be addressed in the budget.

I have concerns about the Bill. The exemptions for houses affected by defective concrete blocks in sections 4 and 5 are welcome. I also welcome the possibility of claiming a six-year exemption. The people who have been affected by that issue are facing enough difficulties. However, section 7 provides for a new charging methodology for the LPT. All valuation bands are to be widened by 20%, which looks okay on the face of it. However, the baseline for band 1 is being increased from €90 to €95, with the potential to increase by 25% on top of that. Band 2 is increasing from €225 to €235, again with the potential for that to be further increased. I read about another band with some interest. The basic rate is also set to be reduced from 0.1029% to 0.0906%, which will apply to properties valued up to €1.26 million. That could mean that somebody with a good income who is fairly well off and living in a house worth €1.25 million could do quite well out of the Bill in comparison with a family in a home worth €250,000, €300,000 or €400,000. I am not sure about the rationale behind that, but the way it is framed in the Bill, it looks like it will benefit the cohort of people who happen to be in houses worth up to €1.25 million and who also have very good incomes.

The other area of concern is that while the Bill allows for variations of up to 25%, that is to increase, but it only allows for reductions of 15%. If we look at the lists for recent years, we can see that many local authorities including in Laois, increased their rates by 15%. Will those who feel the brunt of the extra increases in terms of the changes to the bands and rates also face an increase of 25% in October when it comes to the budget? That must also be factored in.

In an ideal world, local authorities must be able to raise moneys. PAYE tax was increased dramatically - those who were working throughout the 1970s and 1980s will remember this – but the corresponding increase was for PAYE workers to take the hit when rates were abolished. Unfortunately, that destroyed the remit of local authorities and affected local democracy. In an ideal world, we would have sustainable funding at local level, while taking into account the needs of workers.

The key point about the LPT, as it has been framed in the past 12 years, is that no account whatsoever has been taken of means. That is simply not good enough. Means must be factored into it. There is also a lack of transparency in how the tax is spent. I would like to see improvements in that regard. I would also like to see councillors being given a greater say.

I have one further point to make to the Minister about local government funding. In the past five or six years, a great deal of money has gone directly to projects chosen by the management teams of councils. I want to flag this issue for the Minister. It is a real problem. I have asked local councillors about projects I have seen commence, but they say they had no notice of what was proposed and that the relevant matters did not come before them for decision.

It could be the Department of arts and sport or any Department that is lobbing money straight down to local authorities. However, the chamber of the local authority, which is the primary essence of local government, is being undermined. When one starts undermining local democracy, one starts undermining democracy overall. I have real concerns - I wish to say this sincerely to the Minister, and I said it to Phil Hogan in the Chamber in the first year I was here back in 2011 - about local government being undermined and people not seeing local government as valuable and relevant. They need to see what they are voting for be given that control. I can rattle off - I am sure other Deputies can as well - all of the different functions that have been taken away from councillors in the past 25 years. If we continue undermining local government in the way we have been doing over the past number of years, we are going to further erode peoples' trust in local government. It is the nearest form of government to the people. Generally, people know their local councillor. They can talk to their local councillor. Their local councillor has access to senior officials and us. The local councillor or a group of them can contact Ministers if they wish, which they regularly do. They have a right under the 2001 Act to make representations to statutory bodies, public bodies and semi-State bodies, such as the ESB, the HSE, etc. It has to be taken account for. We need to increase the role of councillors and local government instead of continuing to erode it.

One area that needs to be tackled by the Government at central level is how senior departmental officials - I am not too sure about how much Ministers see - are transferring moneys from their respective Departments straight to local authority staff, including senior management. Most of those people are good as well, but councillors do not have any say in how that is allocated, used or monitored. That is not a good thing to do.

That is my take on it. The weakness in the system is that lack of accountability and fairness because of the means of the householder not being taken into consideration. I wish to see the Government move to take that into account in future years.

Shay Brennan (Dublin Rathdown, Fianna Fail)
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I am grateful for the opportunity to address the House on the Finance (Local Property Tax and Other Provisions) (Amendment) Bill 2025. As a representative of Dublin Rathdown, I am acutely aware of the importance of the local property tax, both as a source of funding for our local authority and as a topic of real concern for homeowners and communities across the country. I wish to set out clearly why this Bill is not only necessary, but also fair, balanced and in the best interests of our citizens, local authorities and the future sustainability of our public services.

I will begin by recalling why the local property tax was introduced in the first place. The local property tax, established in 2013, was a critical reform in the wake of the financial crisis. It was designed to broaden our tax base, to provide a stable and predictable source of funding for local governments and to reduce our reliance on volatile transaction-based taxes, such as stamp duty. Since its inception, the LPT has delivered on these objectives. It has become the cornerstone of local government funding, supporting the delivery of essential services that every citizen relies upon every day. From the maintenance of our parks and green spaces to the upkeep of our roads, the provision of libraries, community centres and local amenities, the LPT underpins the very fabric of local life.

Perhaps the LPT's most important aspect is that it is a tax that is retained locally. The revenue raised in each local authority area is spent almost primarily in that area, ensuring that the communities see a direct return for their contribution. This principle of local accountability and local benefit is at the heart of the LPT system and one that the Bill seeks to strengthen.

As with any tax, however, the LPT must evolve to reflect changing circumstances. We cannot ignore the reality that property prices have risen significantly since the previous revaluation in 2021. According to the Central Statistics Office, residential property prices nationally have increased by approximately 24% over the past four years. In some areas, particularly outside of Dublin, the increases have been even more pronounced. Without reform, there would have been a sharp and sudden increase in LPT liabilities for many homeowners. This is an outcome that would have been neither fair nor sustainable. The Government has listened to these concerns and engaged with stakeholders, local authorities and the public to ensure that the system remains balanced, equitable and fit for purpose.

This Bill addresses these challenges head on. It contains a number of key provisions, each designed to ensure that the local property tax remains fair, proportionate and sustainable. First and foremost, the Bill widens the valuation bands by 20%. This means that the bands within which properties are valued for LPT purposes will be broader, allowing many homeowners to remain in their current bands despite increases in the property values. This is a crucial intervention that ensures that the vast majority of homeowners - an estimated 96% - will not see their LPT liabilities jump by more than one band. Many will see no change at all. To put this in context, while property prices have risen by approximately 24%, the widening of the bands, combined with the new base rate of 0.0906%, means that the average increase in LPT for most homeowners will be limited to less than 5%. For properties valued under €1.26 million, base LPT charges will increase by between 5% and 6%. This is a modest adjustment, one that is in line with property value growth and far less than the headline rate of inflation. For higher value properties, the Bill ensures that LPT charges are proportionate to their market value. Properties valued at more than €2.1 million will be charged on their actual value, with progressive rates applied to the different proportions of the property value. This progressive element is fundamental to the fairness of the system. It ensures that those who own more valuable properties contribute accordingly while protecting those on lower and middle incomes from excessive increases.

Another important feature of the Bill is the setting of the valuation period to five years from 2026 to 2030. This provides certainty and stability for property owners, allowing them to plan their finances with a certain degree of confidence. The next revaluation will take place on 1 November 2030, maintaining a regular cycle that reflects market conditions without causing undue disruption.

The Bill also addresses affordability concerns by indexing the income thresholds for LPT deferral. This means that those on lower incomes or with limited means will continue to have access to deferral options that reflect current economic realities. The thresholds have been updated to keep pace with inflation, wage growth and increases in State payments since 2021. This is a vital safeguard that ensures that the LPT does not become an undue burden on the most vulnerable in our society.

The Bill empowers local authorities by allowing them to vary the LPT rate upwards by up to 25%, giving them greater flexibility to respond to local needs and priorities. The downward variation remains capped at 15%. Importantly, any additional revenue generated from these changes will be retained by the local authorities, ensuring that the benefits of this tax reform are directly felt in local communities through improved services and infrastructure.

As a TD for Dublin Rathdown, I wish to speak directly to the impact of these changes on my constituency. Dublin Rathdown is a vibrant, diverse community that is home to families, young professionals, retirees and people from all walks of life. It is an area with a strong sense of community, but also one that faces real challenges, whether it is in housing, transport or the provision of local amenities. The LPT has played a crucial role in supporting local services in Dublin Rathdown. It has funded the maintenance and enhancement of our parks and playgrounds. It has supported local sports clubs and enabled the delivery of community initiatives that bring people together. It has helped to maintain our roads, improve public lighting and support the work of our libraries and community centres. I have spoken to many constituents who recognise the value of these services, but who are also concerned about the potential impact of rising property prices on their LPT liability. This Bill responds directly to those concerns. By widening the valuation bands and limiting the average increase to less than 5%, we are ensuring that the vast majority of homeowners in Dublin Rathdown will see only a modest adjustment to their LPT bills, one that is fair, proportionate and manageable.

For those on lower incomes, the updated deferral thresholds provide a vital safety net.

No one should be forced to choose between paying the LPT and meeting basic needs. The Government is committed to protecting the most vulnerable and this Bill delivers on that commitment.

I am aware that some in this House and, indeed, in the wider public have raised concerns about the LPT. Some argue that it is an unfair burden on homeowners or that it fails to take account of ability to pay. Others suggest it should be abolished altogether or replaced with an entirely different system. Let me address these concerns directly.

First, on the question of fairness, the LPT is a progressive tax by design. Those with more valuable properties pay more while those on lower incomes have access to deferral options. The widening of the bands and updating of deferral thresholds in this Bill further enhance the fairness of the system. The alternative of relying on transaction taxes or general taxation would be less predictable, less stable and ultimately less fair.

Second, on the ability to pay, the LPT is not only a tax on home ownership, but a contribution to the services that make our communities liveable. The updated deferral thresholds ensure that whose who genuinely cannot afford to pay are protected. The vast majority of homeowners will see only a modest increase and, for many, the benefits of improved local services will far outweigh the cost.

Third, to abolish the LPT would be to undermine the financial foundation of local authorities. It would mean less funding for parks, libraries, roads and community services. It would mean greater reliance on central government funding, reducing local accountability and local decision making. It would be a step backwards, not forwards.

On alternatives, some have suggested that the LPT should be replaced with a site value tax or another form of property taxation. While there is merit in considering the long-term evolution of our tax system, the reality is that the LPT is a well-established, well-understood and administratively efficient system. The changes proposed in this Bill build on that foundation, making the system fairer and more sustainable for the future.

It is important to situate the Bill within the broader context of our public finances. Ireland has made significant progress in recent years in restoring fiscal sustainability, reducing our debt burden and investing in public services. The LPT is a key part of that progress. It provides a stable, predictable source of revenue that supports local initiatives and reduces our reliance on more volatile revenue streams. In a world of increasing uncertainty, whether due to global economic shocks, climate change or demographic change, it is now more important than ever that we have a broad, stable tax base. The LPT is an essential part of that base and the Bill ensures it will remain fit for purpose in the years ahead. The Bill also delivers on the commitments made in the programme for Government, which promised to ensure fairness and stability in LPT payments, retain revenue locally and protect those on lower incomes. The Bill fulfils all of those promises. It is a balanced, responsible and forward-looking Bill that will serve our communities well.

I will turn to the principles that underpin the Bill, namely, fairness, stability and local empowerment. By widening the valuation bands, updating deferral thresholds and applying progressive rates to higher value properties, we are ensuring that the LPT remains fair and proportionate. Regarding stability, by setting a five-year valuation period and providing certainty for homeowners, we are ensuring the system is stable and predictable. Regarding local empowerment, by allowing local authorities to vary the LPT rate and retain additional revenue, we are strengthening local accountability and ensuring communities see a direct return for their contribution.

I urge all Deputies to support the Bill. It is the right thing to do for homeowners, local authorities and the future of public services. It is a Bill that balances the needs of today with the challenges of tomorrow. It delivers for the people of Dublin Rathdown and communities across Ireland. Let us work together to ensure the LPT remains a fair, sustainable and effective source of funding for our local authorities. Let us support the Bill and, in doing so, support the future of our communities.

Ruairí Ó Murchú (Louth, Sinn Fein)
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Sinn Féin has always opposed local property tax. We saw it for what it was. It was imposed at a time of austerity. It was not about services or fulfilling the needs of local authorities. It was literally about ensuring money was brought in because of the dreadful circumstances the State found itself in. It was about us following through on the edicts of the International Monetary Fund, IMF, and others.

When we talk about taxing wealth, we cannot think or talk about the family home. It must fall into a different category. I accept that some of the reason this will be carried out is on the basis of ensuring in November that the increases would be somewhat reduced, but with increasing house prices - we know about the significant issue of the housing crisis and its huge impact - people will consequently have to pay more tax on their properties. We are not necessarily taking into account their ability to pay. I accept that there are criteria people can meet to avail of deferrals, but deferral means it is still on the books. Someone has to pay and there will be a percentage - I believe it is 4% - accrual in interest. That in itself is not a solution.

I agree with what Deputy John McGuinness said. A huge question about local authority services is the old one of what people are getting. It is about the ability of the local authority to deliver. I might do something similar to the Deputy by raising a particular road, that being, the N53, which connects Dundalk with the N2 at Castleblayney. An upgrade is to happen and we await tendering and TII funding for that. It is for the stretch from Hackballscross to Rassan. There is a particular issue at the turn-off on the N53 for Crossmaglen. In recent weeks, there have been a number of smashes. A local pointed out to me that none of the smashes involved trucks, given their height. There seems to be a crest on the road that affects vision at a particular point. We cannot rule out that speed always creates a scenario, but there are certain issues that need to be addressed.

The ability to increase the LPT by 25% has some element of blackmail. It determines who will be screwed over. Is it the person who has to pay the LPT or will it be that we have reduced services? However, even if a local authority such as mine were to go for that 25%, no one in this room could think that would deal with all the issues that exist, such as housing maintenance, road upkeep, issues that impact on communities such as dumping, estate management or any of the other pieces the local authority is at least somewhat responsible for. We need to get real about how we deliver local authority funding and services.

In the 20 seconds I have left, I will point out - I hope the Minister will address it - that there seems to be a particular issue. St. John of God has its own an approved housing body and is able to deliver disability housing using the capital assistance scheme. It has a number of houses and is in discussions with Louth and Meath county councils. There are rentals at the moment for at least eight residents or so and it looks like the kibosh has been put on that. There seems to be an issue with the Department of public expenditure. I realise I am off topic with this, but this is my first opportunity to raise it and it might be the only one I have to deliver the message. I ask the Minister if this issue can be looked at. St. John of God has also told me that there is an issue with the capital advance leasing facility, CALF. It looks as though disability housing is being cut off. I brought it up with the Minister for housing privately, but it needs to be addressed.

Paul Gogarty (Dublin Mid West, Independent)
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I have been listening to this debate with some interest. There have been various contributions and Deputy Gibney's would be the most similar to mine in this context. In essence, while this proposal has some merit if it were taken in an isolated way, it is basically tinkering around the edges because we do not have a European-style property tax in Ireland.

The way to work this out is simply by looking at the budget for South Dublin County Council, my own council. Its budget for 2025 is an estimated €392 million. It generates an income of €227 million from a range of services and sources, including rents, fees, charges, loan repayments, grants and recoupment, much of which comes directly from the Government. Of the remaining amount, €133.5 million comes from commercial rates and €31.5 million from the local property tax, which is a drop in the ocean.

When I came back on to the council after being a TD in 2014, for the first five years of my term I consistently voted not to reduce the local property tax by the 15% allowable at the time. We had the somewhat surreal situation of a Fine Gael councillor on the one hand and a Sinn Féin councillor on the other hand both working together to save a few quid for the hard-pressed residents, but missing the fundamental point which was that the Government took with one hand and gave with the other. It would have meant only a small smidgen of extra money by choosing not to reduce it by 15%. The Government is obviously putting a challenge to local elected representatives in situations like that.

Elected representatives have seen the powers of local government diminished over the years in many cases and rightly so. We were prevented from material contraventions, for example, because they were abused. There were very cosy relationships with developers and as such it could have been argued back in the day, before councillors were paid a reasonable sum, that the chances of corruption were quite high. Besides the legitimate donations, which I would personally disagree with, I do not believe that any of our elected representatives around the country are taking money now. However, the fact remains that they do not have the power. We need European-style local government with the power to raise real money.

Social Justice Ireland has suggested it should be a site-valuation tax rather than local property tax but we should really be reducing income taxes proportionately and allowing a proper workable local property tax where people can say, "That paid for services." We have to make a decision. As we do not have that with this legislation, we need something bigger.

Peadar Tóibín (Meath West, Aontú)
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The local property tax was introduced by Fine Gael and Labour to fill a massive hole in the budget that was created by Fianna Fáil crashing the economy during the banking crisis. The local property tax is in many ways a child of the economic catastrophe which was caused by the Fianna Fáil-led Government at that time. It was a Fine Gael and Labour austerity tool, which was introduced to find other ways of taking money out of people's pockets at a time when the country was absolutely broke. It was designed to fill a gap that was created by the withdrawal of central government funding to local authorities. In fact, it was not promised new income for local authorities but just a straight swap of a local government grant that was given by central government over periods of times.

All tax comes from people's pockets. No matter what tax people pay, whether it is income tax, property tax or VAT, it all comes from people's pockets. Over the last couple of hundred years we have decided that progressive taxes are the best idea because the amount of tax people pay is based on the amount of income they have. However, the problem with property tax is that it is not progressive; it is completely ignorant of the level of income that comes into a family. For sure, there are significant proportions of the population where the property is valued at roughly the same proportion as income coming into the house, but there are major disparities to it. If we are honest, this Bill admits that the value of the property is completely disconnected from the incomes coming into people's homes which is why the bands need to be reset. I have no doubt that the Government will also need to reset the bands in another number of years because the increase in house prices is continuing at such a trajectory that that disconnect will remain embedded within the system. That is a basic fault and problem with the property tax at the moment.

The other element in this is that the cost-of-living crisis is really hurting families at the moment. We have not had a proper debate about the cost-of-living crisis since the general election and the start of this Dáil. It is getting worse at the moment. People will have seen that the cost of petrol and diesel has started to creep up significantly. That is being pushed by the war between Israel and Iran. If Iran follows through with its threat to stop traffic going through the Straits of Hormuz, fuel prices will spiral in the next while.

Grocery price increases are quite incredible. The cost of groceries for families has increased by a third since 2018 and that trajectory is continuing. Even since April, we have seen a marked increase in normal staples, such as chicken. The CSO's price watch monitoring indicated that 1 kg of chicken breasts could be bought in April for €5 and that is costing families €11 at the moment. The price of a pound of butter is now €5. In March the cost of a pound of butter went up by 76 cent. All that grocery inflation can be added to rental inflation at the moment. The cost of a new rental lease is now about €2,000 on average, which is an amazing price. Families are put to the pin of their collar. Families are hurting. Families are curtailing their activities. There is enormous strain coming on families due to grocery inflation and other inflation.

I will admit that much the inflation that is happening is external to the Government. The Government does not have its hands on the levers of much of the inflation that families are experiencing. However, it has a direct influence on some of that inflation. Last year the Government took in €4.1 billion on fuel taxes, the highest fuel tax take ever in the jaws of a cost-of-living crisis, which is incredible. Normally the instinct would be to reduce the fuel taxes when people are hurting so much. Carbon taxes now surpass €1 billion and according to the Government's policy, it is set to continue increasing for the next five years.

The M50 tolls have taken €2.2 billion since 2008. That is another lever in the Government's hands. The Government took in billions of euro in VAT on the cost of construction. The Minister should consider reducing VAT on the cost of the construction, first, to reduce the price of houses and second, to stimulate market activity. That would do so in a manner that does not hurt people through increased prices or increased rentals in the future. It would have a similar effect that it is trying to get with its new rent-pressure zones at the moment.

The Government does have its hands on the levers of certain cost increases. The Government is a source of inflation for families and this is another source of inflation. I understand that its objective here is to try to ameliorate the costs that would have accrued to families if it did not touch those bands. However, the fact is there will be an increased cost coming on families in the future. If the house price increases continue, that will hurt families. This is a tax which is ignorant of the amount of income that comes into families' pockets and will add further to the pressure on families.

The other side of this coin is what value we get. I live in a great county, but it has seen its population radically increase. When my father was young, 60,000 people lived in Meath. When I was young, 100,000 people were living in Meath and now 250,000 people are living in Meath. With practically every central government investment into local authority delivery and provision, the Government has not kept up with population growth. As a result Meath County Council has one of the lowest incomes per capita of any local authority in the country and that is significantly hurting spending at the moment.

Michael Collins (Cork South-West, Independent Ireland Party)
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Local property tax was set out to be tax for local authorities. I am not totally opposed to any tax as long as it delivers on exactly what it was meant to be. I will outline to the Minister exactly where it did not deliver in County Cork in recent years. A road at Allihies collapsed and there is no longer a lead road into that community. The council does not have money and has basically walked away from repairing the road. It would not happen up here where if a road collapsed, it would immediately be repaired. Of course, it would be of huge importance and I would agree with that. Councillor Danny Collins and I have been working with the people of Allihies. Even though they have all paid their property tax, they look over at this road that they can no longer travel on. The council has given up and walked away from it.

In Lyre, Clonakilty, a bridge collapsed almost ten years ago. I brought it up in one of my first weeks in the Dáil. I went to see it. It was a link road for the local community half a mile up on the Clonakilty Road. Again, the council walked away because it does not have the funds to build a bridge. The people of Lyre and Clonakilty ask what they have got out their property tax because we are not able to deliver. The very basics are not being fixed.

I was talking to Councillor Ger Curley yesterday, who is councillor for Independent Ireland, about the housing assistance payment, HAP. Why has the HAP not increased in relation to housing? This should come under the property tax. I am fairly sure it does come under the property tax. With the rent pressures zones, many people are telling me that in the past week auctioneers have been inundated with people walking away from letting house. That is another crisis in its own right. The HAP has not increased and people are finding it very difficult to make ends meet. They are paying the higher rates and the rates are getting higher but the HAP has not risen to meet that. Local property tax should have delivered in that area.

There are council rates and there are outside seating rates. It is a hit on the business person. VAT is a hit on the business person. My brother, Councillor John Collins, recently tabled a motion that rates should not apply to the businesses of Bandon at present because the streets are ripped up. That is fair enough because there will be a long-term benefit from it. However, the streets are ripped up so businesses are losing money hand over fist. When businesses are struggling, something should be provided and maybe local property tax should be looked at in that regard.

I was talking to Councillor Daniel Sexton in regard to play parks, which are amenities. The Leap local community is fundraising to build its own play park. In Skibbereen, people are looking to fund their own amenities. The local communities are delivering, not the LPT which was meant to deliver. This will continue. It is hard to support something when the people do not get their money back.

Richard O'Donoghue (Limerick County, Independent Ireland Party)
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I am the chairperson of the Committee on Budgetary Oversight, and I am delighted to be Independent Ireland's first chairperson. An invitation to the Minister to attend our meeting next Tuesday was sent by the clerk to the committee. We had facilitated the Minister, in that he could not make it two weeks ago. We changed people around and other people appeared before us. However, we got a note back saying the Minister's officials were not available on that date. I do not accept that. With all due respect to the officials, it is the Minister I want. If they are missing, that is fine. I want the Minister, Deputy Chambers, and the Minister, Deputy Donohoe, to attend our committee. It is a very important committee. We are talking about budgets and oversight. I hope the Minister will be in attendance, with or without his officials.

To return to the business at hand, the local property tax is a fund for the local authorities. I do not want to see the local authorities without the funding to carry out different infrastructure works within our areas. However, if the local property tax had to go tomorrow morning, there are still funds to replace it with what the Government has been taking from people building their own houses. The waiver for the planning contribution fee has been removed and it has been reintroduced. A person building a 2,000 sq. ft house has to pay between €5,500 and €6,000 to build their own house, on top of a local property tax. Four years ago, the charge was €120 per sq. ft. The Government at the time, on VAT alone, was making €34,500 from a person building his or her own house. Today, the same house, with the same square footage, costs about €200 per sq. ft and the Government takes €54,000. In four years, the tax take from somebody building their own house has increased by €21,600 based on a 2,000 sq. ft house. On top of that, people have now to pay the planning permission fees of €5,000 or €6,000 and a local property tax. The Government has increased the tax by €21,600 on top of the planning contribution fee. The increase has gone to almost €35,000 at a time when people are fighting inflation. A house that was costing €240,000 now costs €400,000. That is an increase of €160,000 that must be paid for the same house. Out of that, the Government has taken an increase in the tax take.

How much can people manage? Their mortgages are now gone to 30 years or 40 years in order to try to put a roof over their heads. We are talking about inflation. The local property tax could be done away with. The councils could be supplemented by the extra tax being taken at source. If a person is living in a town or village that has been without infrastructure for years, because with active travel the money is put back into the cities and not into the counties, there is not a level playing field. Send the money back out to the counties and look after the people with the extra taxes they are paying.

Ken O'Flynn (Cork North-Central, Independent Ireland Party)
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There are times in public life when a policy, however well-intentioned, by design, strays away from its original purpose. To my mind, the local property tax is such a policy. It is not fair and not a sustainable way of supporting local services. By its very practice, it is detached from the principle of equality and economic reality of many citizens. Let us speak plainly in this House. This exists today in our system and is a burden for some of our older citizens, men and women who have spent their lives buying or building their homes, raising families, contributing through work and taxes. In these cases, many, who have previously paid property levies in some way, shape or form prior to 1978, are suffering. In the 1980s, there were service charges in many local authorities and city councils. People have always been paying into some sort of system. Many of these people are now in retirement, often living on their own and their incomes are sharply reduced. They have already paid taxes on their property and on the houses they built. Their heating bills or refuse charges have not halved but quite often their income has halved. There is an argument at this stage that anybody over the age of 65 to be exempt from property tax, in particular those that are dependent on a fixed income. Just because somebody bought something in the early 1980s or late 1970s for IR£3,000 or IR£4,000, which has increased in value - in places like Cork city houses that went for IR£4,000 in the early 1980s are now valued at €500,000 or €600,000 - their income is €230 or €270 a week, depending on what social welfare is available to them. It does not make sense to me. Many people are struggling in large homes. They cannot downsize. They want to stay in their communities where they have family, friends and support but they are paying huge amounts of money on property tax for something they have already paid property tax on at some stage.

Equally, there is a disparity in how property tax is collected. At present, local authorities retain 80% of the tax and the other 20% is pooled into a national equalisation fund to support councils whose LPT income does not meet the base line. In principle, that can be justified but the tinkering around over the past number of years by Department of housing, which conducted a review in 2024, leaves more questions than answers when it comes to local property tax.

I agree with my colleague, Deputy Michael Collins. I do not believe there is a properly funded local authority in the country. If the Government offered an extra €10 million or €20 million, the reality is a local authority would not refuse it. We are underfunding our local authorities continuously and that has to be addressed.

Malcolm Byrne (Wicklow-Wexford, Fianna Fail)
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I thank the Minister for bringing forward this legislation. The bigger debate we need to have is precisely that around the funding of local authorities. It is interesting that our debate is focusing on the question of the local property tax. The Minister will be aware that the overall budget for local authorities in the country is in the order of €6.7 billion annually.

We are here debating the 6.5% of budgetary income that comes from local property taxes. We are very unusual in a European and international context. About 42% of local authority budgets comes from central government funding and 27% comes from a 200-year-old system of commercial rates. I am aware that the Minister for Housing, Local Government and Heritage has announced a review of local government in terms of additional powers. If we are to have that in place, we need to look seriously at the funding mechanisms. In particular, the question of commercial rates needs to be addressed. A 200-year-old system which is based on the floor space of a premises is completely unfair in this digital age. Amazon is the world's biggest bookseller. As an avid reader, the Minister will be aware that Amazon will only have to pay commercial rates on its warehouses, yet the independent booksellers who are located all over Ireland will be paying commercial rates within their local communities. That is similar throughout the system. The broader question of local government funding needs to be examined, particularly reform of commercial rates and basing them much more on turnover. We already do that to a certain extent with the telecoms companies. It needs to be widened.

On the question of a local property tax, 6.5% of the overall budget is very low in European terms. I can talk about what we did when I was a member of Wexford County Council. We took a decision nearly ten years ago to go for the maximum 15% increase. A very clear provision within that was that the 15% increase would be hypothecated for social and economic development within the county. It was never going to be put into the general funds for the council. It was used to generate funding towards supporting economic activity and the redevelopment of parks. Gorey town park was a particularly fine example. It was used so that we could get leverage on loans and so on. It worked particularly well. While there was certainly opposition, which I will come to in a moment, for most householders, after a while, when they realised it was less than €1 extra per week, they accepted that payment having to be made. I am conscious others may have referred to cases in which people may be asset-rich but income-poor or may have inherited a big house, which does cause a difficulty.

It is interesting that many of those who opposed the 15% increase in LPT were among the first to get into photographs for those projects that were funded by the local property tax. We have a very unusual situation in this country. Property tax is normally regarded as a means of redistribution of income and is championed by many left-wing parties across Europe. We have the unusual situation that the populist Opposition shares the views about the abolition of our property tax with the extreme right wing of the Conservative Party and members of Reform. It would not have been the first time Nigel Farage and leaders of Sinn Féin would have shared a platform on particular issues.

We need far more effective communication on how the local property tax is spent. South Dublin County Council has been particularly good on communication, almost breaking down to householders and constituents how it is spent. Similarly, in the case of Wexford County Council there have been efforts to show specifically the projects that have been funded out of that 15% increase. In that regard, I welcome the fact that the legislation now allows for variance of up to 25%. It is critical that this power remains with the elected members and that, ultimately, the elected members will always be able to have control. I would love to see a situation where we would go much further and allow elected members to have a far greater say over income generation and expenditure in our local authority budgets. I hope that will feature in the review the Government has instigated, led by the Minister, Deputy James Browne.

This is a very important Bill and there are a number of innovative aspects to it. This is only a small part of the overall question, however. The Minister might indicate in his response if he has any current plans to look at the current system of commercial rates as a method of funding local government, and to address the inequity that continues to exist there. We cannot continue to have a 200-year-old system which is basically how commercial rates continue to operate in the digital age.

Mairéad Farrell (Galway West, Sinn Fein)
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I thought the other Member would have used his time. I will get to my own speech. I would love to address some of the nonsense about my own party but today I do not have the energy in me to start a fight. I will stick to the speech I have.

A Aire, I think there is a bit of an irony in what we are doing in dealing with this Bill, which is to nominally but not effectively reduce the cost of property tax that households will have to pay. The Minister has to reduce it because the coming revaluations in November would have increased the costs. As we know from the protest outside regarding the housing crisis, house prices have now been driven back up to above Celtic tiger levels, meaning households would have to pay even more property tax. There is something symbolic about this. The Government introduced a tax on people's homes, then worked overtime to increase the value of the property, only to have to introduce new legislation to reduce the tax it introduced. Despite this Bill, people will still be paying more because of the revaluations. According to the Central Statistics Office, property prices have increased by a national average of 23% since November 2021. Galway has been one of the worst affected places. Often when we talk about the housing crisis, we only hear about Dublin. The impact on people's lives in Galway is absolutely horrendous. According to one source, in 2024 alone, property prices in Galway were up 17% on average.

My party has opposed the property tax from day one, as the Minister knows. We oppose the idea that, in this day and age, someone should have to scrimp and save to get a deposit to try to make it out of a rent trap that has been set for so many, just so they can get a 30-year mortgage and pay off massive principal and interest, only then to be slapped in the face with another tax. I remember what the concept was when it was introduced. I heard the previous speaker describing all the fantastic things it funds in local services. It was a change that this was the way local councils were funded. It was moved over. I remember because I was in the city council at the time.

I look at Galway City Council and Galway County Council and all the things they simply cannot fund. One of the main things I deal with in Connemara is serious issues with different roads. Sometimes I get slagged about it because I am out looking at different roads and people are asking me if I am an engineer suddenly, looking at these roads. All of these roads have serious issues. There is a serious impact on public safety when it comes to dealing with them. I contact Galway County Council and more often than not, the issue is that there is no funding to deal with those roads. We know our councils are hugely underfunded. Galway County Council is particularly underfunded. It is incredibly frustrating constantly having to go back to constituents and tell them the money is simply not in place.

Tá fhios ag an Aire go maith nach bhfuilimid i bhfábhar na cánach maoine seo. An fáth nach gcreidimid ann ná gur cáin é ar an teaghlach. Cáin is ea é ar an teach baile atá ag daoine. Dúradh linn ag an am go raibh sé seo ag teacht isteach mar gheall go gcuireadh sé leis an airgead atá ag comhairlí áitiúla, ach ar ndóigh tá a fhios againn go maith nach bhfuil sé sin fíor. D'aistrigh sé an bealach go raibh maoiniú á thabhairt go dtí na comhairlí contae agus na comhairlí cathrach. Níor chuir sé leis an maoiniú a bhí acu. Go rímhinic bhí mise amuigh i gConamara ag breathnú ar bhóithre. Aon uair a bhímse i dteagmháil leis an gcomhairle contae, an rud a dheireann sé liom ná nach bhfuil an t-airgead aige leis na bóithre sin a dheisiú. Tá na bóithre seo fíordhainséarach. Ní aontaím leis seo.

Barry Heneghan (Dublin Bay North, Independent)
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I rith an toghcháin, agus mé ag caint le daoine ag na doirse, bhí go leor daoine ag cuir ceist orm faoi seo. An cheist a bhí acu ná, “cá bhfuil an t-airgead ag dul?”. Caithfimid bheith níos soiléire faoi na háiteanna ina bhfuil an t-airgead don LPT ag dul. Is rud é sin gur gá dúinn díriú isteach air.

For most households, the message is pretty straightforward. Property values have gone up. In Dublin especially, local property tax will also go up. For houses valued at under €425,000, the increase is likely to be about €30 or €50 annually. That might sound fair on paper but the people whose doors I knocked on did not know where this money was going. That needs to be clear. We need to show the people paying the local property tax where exactly their extra taxes are going.

I have only recently been elected to this House. Working on Dublin City Council, I could see the centralised decision-making and standardised funding process. The local authorities and, in particular, councillors do not have the decision-making abilities they should have with regard to the local property tax. I am well aware they will be able to vote on whether the local property tax goes up or stays at the same rate but a clear system is needed to allow councillors to see where Dublin City Council is spending the local property tax increase and to decide where this increase in tax revenue will be put in their local areas. If councillors are going to be held responsible by the public for the lack of local services in their areas, then they need to have power over local budgets. It is not the case, from my experience, that councillors have enough power in their local areas. The local authority and the relevant civil servants decide where the money goes. The councillors can give their opinions and sign off on it, but they do not have enough power.

I want to see councillors being able to decide there is a need for public toilets, a disability centre or more funding for the local GAA club. This is something I would really like to see, and not with ten layers of approval from Dublin City Council, Fingal County Council or any of the local authorities. It matters for the people living in an area and paying this tax to know where the money is going and that the people they are voting for will have the ability to divert these tax revenues. This is what the tax is supposed to do. It is not just about raising revenue, but about reinvesting in the communities paying these taxes and paying for amenities in places where people can gather, learn and play. This is what a fair and functional local property tax system should deliver.

We should not underestimate the pressure that councillors are under. I was one and people think the councillor is the person making this decision. Who are they not to blame? If we are going to empower local government to make real change, let us start by giving councillors more autonomy over the direct funds raised when they are the ones deciding and going to be under the hammer. If we believe in community and participation, then let us hand this decision back and give more power to the councillors.

Carol Nolan (Offaly, Independent)
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I welcome this debate and many of the provisions of this Bill. I am aware that my local authority, Offaly County Council, generated approximately €4.9 million in local property tax revenues in 2024, but also that our baseline was €11.2 million. This means we received about €6.2 million in that 2025 distribution of equalisation funding. While that is welcome within the confines of the local property tax system, the heart of the matter remains the fundamental unfairness of LPT as a tax in and of itself. People work, save for years, pay their taxes and buy homes, and then they must continue to pay increasing rates of tax on those homes, which they may own outright, until the day they die. I note, however, that this legislation allows for tiered rates for higher valued properties to ensure they contribute proportionally more, aligning with principles of fairness in taxation. We all know, though, that house prices are radically out of step with actual value. There is scope for significant inequity to flow into the LPT system.

I welcome proposals to expand the LPT exemption for defective concrete blocks in some counties. I hope that if more counties are found to be impacted by this issue, they too will be shown similar latitude. What we should be doing, however, is finding every way possible to tax not the ordinary homeowner and ordinary worker but the massive vulture funds and investment funds that are swooping in and wiping out any possibility of Irish couples and families bidding on and owning their own homes. While we are here today discussing local property tax, we have to accept that we desperately need an urgent debate on how our taxation and property purchasing systems are facilitating the expansion of the housing collapse for ordinary people. I accept, as the LPT is apparently here to stay, that there is at least an attempt in this Bill to introduce a fairer LPT calculation method that supports homeowners affected by defective concrete blocks and to provide local authorities with greater flexibility and the ability to adjust deferral thresholds to account for inflation.

Mattie McGrath (Tipperary South, Independent)
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I will speak again on behalf of the hard-pressed homeowners of this country, especially those in rural Ireland and in my constituency of Tipperary, from Tipperary town down to Cahir, Clonmel, Cashel and Carrick-on-Suir as well as the villages and rural houses. These people continue to be squeezed by this unjust and unnecessary local property tax. The Bill proposes to increase charges on the vast majority of households despite the cost-of-living crisis. We have also been told there will be no more cost-of-living supports despite food prices, food inflation and everything else rising continuously - we do not see any respite from that - and despite the rising mortgage rates and countless families already struggling to keep their lights on.

I welcome some aspects of the legislation but I do not welcome that we can give our local councillors the latitude to increase the rate of local property tax by 25% instead of 15%. What will happen? Management will push for an increase of 25%, and more if they can get it, because councils have been cash-starved by central government for quite a while. I used to go around boasting that in the 1977 general election, as a young buachaill óg and member of Fianna Fáil, I campaigned for rates to be taken away. Since then, the county councils have been starved. In hindsight, it was a bad decision, but you learn from your mistakes and when you are in a party, you must do what you are told to do. I ask the Minister to re-examine this because it is not fair.

There are charges, despite rising mortgage costs and everything else. There are some areas where payment can be delayed and in some cases, it can be postponed. I have a few of those cases on my hands now. The parents are deceased and the bills had accrued on the properties before they passed on. The local property tax punishes people simply for working hard and putting a roof over their heads. It is blind to the realities in places like Tipperary town, Cahir, Cashel, Carrick-on-Suir and all the other towns where housing values have increased continuously and very few services are being provided in return. In fact, no services are being provided. We saw this last January when the snow fell. Not even an egg cup of salt was to be got for households. What do they get for the local property tax? All the local authorities now have a skeleton staff. I praise the staff who are there but there are not enough of them. There is no shortage of people ag obair inside in the offices, but there is only a skeleton staff on the ground. There was a time when people got these services and were looked after to the best abilities of the local authorities. People are not getting anything in return now. I know that in this debate people in Dublin will say they are being punished, but they have every service you could ever think of, from street lights and street sweeping to public transport, you name it. In the country, people are on their own in the sticks.

I have long opposed the LPT in principle. I said it in 2013 and I say again today that a family home is not a taxable asset but a necessity. We know how many people do not have homes and we should support them in any way we can to get them. This tax hits the elderly, those on low incomes and those who worked hard all their lives to buy a modest home. Now, with inflation still biting, the Government is quietly ratcheting up the burden again.

As I said, the councils will be told by the management that there are local services involved and carrots will be dangled. I agree that some of the money goes into vital services in rural areas and villages, such as in different enhancement schemes and everything else, and that local councillors have some discretion.

It is the basis of the thinking behind this tax. Anyone who works hard to put a roof over their head should be supported. We will have a debate tonight and tomorrow about landlords, tenants and everything else. There are good and bad tenants. There are other issues. People put their hands in their pockets to put a roof over their heads or to try to maintain their houses. There is upkeep and maintenance to do. In view of the harder winters and everything else, it takes a lot of work to keep houses intact.

I was at a meeting recently with the management of Tipperary County Council. I was shocked to hear that the council must find €15 million before 2030 to refurbish and bring its buildings up to the new standards relating to the so-called carbon tax. Some of them are modern buildings, mind. The council must then spend €10 million or €11 million on a fleet. I questioned the necessity of a fleet. Management said that one diesel lorry must be replaced with double the number to take account of after-hours work, longer working days and everything else. That is nonsense. When I asked where this money was going to come from, there was silence. When I asked again, I was told that because there is no Government funding for this, the council is going to raise the money from two areas, namely rates and property tax. All this money is going to be invested in fanciful projects.

We have fine buildings in Nenagh and Clonmel. We constructed a building in Cashel and then closed it. It has been abandoned. Tipperary town has all new offices as well. We will now have to spend scarce money on bringing those up to standard. Any time I was inside those buildings, I had to take my jacket off because of the heat. While they say they are trying to bring these buildings up to standard in the context of future-proofing and whatever else, we are going to penalise ordinary citizens who cannot get SEAI grants and who have no money to put up. There is a two-year waiting list, or maybe it is longer than that. I call on the Minister and the Government to do something in that regard, because I will not be supporting this Bill. I cannot support it. I spoke against this measure in 2013. It would be hypocritical of me to support it now. Despite that, I welcome the fact that mica issues will be given some kind of consideration, although mica is an issue that is growing exponentially. We will have more areas with mica. It is ill-judged and ill-timed to try to force people to pay this tax, especially as we are entering such an uncertain period and when the cost of living is so high.

All the people we are talking about have their own houses. They pay everything and never shirk their responsibilities. They pay their mortgages. They pay repair men and maintenance men and for their houses to be painted. They pay for everything, you name it. They do not get any supports. This is an unjust and unfair tax. It should be shelved.

Danny Healy-Rae (Kerry, Independent)
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I am glad to get the opportunity to talk about this Bill. It relates to an important topic. People talk a good deal about local property tax, especially those who cannot ill-afford to pay it and who are often in trouble. It gives those people who are living hand to mouth and who barely have enough to cover the cost of everything, from putting food on the table to keeping their heat or whatever going, great trouble. This measure will facilitate the crowd with the expensive houses worth more than €1 million. The value of houses has gone up everywhere. To buy a house is an impossibility with the costs and the rates that apply now. This is a tax on the family home. While we get services out of it, I often wonder whether the money is divided out fairly and whether there is real accountability for it within the local authorities. It gives some local authority members a lot of anguish. I see that chief executive officers of the local authorities will be given the facility to increase it by 25%. I do not see any facility to bring it down if there were a need to do so.

There are certain things that arise in this regard. Many people do not get much for the property tax. We had incidents in Kerry this spring where the streetlights were not working in many towns and villages such as Kilgarvan, Castleisland and Scartaglin. There was so much trouble. It took months to get them repaired. I do not know what was wrong, but people were continuously giving it to us in the neck that they did not even have the streetlights any more for safety when it came to walking to the shops and so forth.

We used to have a facility in Kerry County Council where two roads could be nominated for repair if they were in a bad state. A total of six councillors were in that area at the time. This used to happen in July. Roads which are not on the three-year roads programme fall into disrepair. It happens due to the impact of lorries, bad weather, frost and even heat, which can lift the tar and leave roads in a desperate state. That scheme was abolished in 2012 because the country was in a desperate state financially. It has not been restored since. The scheme gave the councils a bit of power and made them feel wanted and needed. Councils felt they could respond to the requests of the people. That is sadly missing, and I am asking that it be brought back.

As already stated, many people are living in poverty. Many are poor and struggling to put food on the table. It gives them a lot of trouble, and I feel for those people. There should be some way of assessing people’s ability to pay this tax. More often than not, the people I refer to live in local authority houses. Although the councils are the landlords in this situation, if these people request little repairs to their houses, the councils do not seem to have the money to do many of them at all.

We see money being wasted. In Kilgarvan, which is the village I left today at 6 a.m., there are two council houses that are voids. They were lived in until November last. The roofs and chimneys have been taken off them and air-to-water heat systems are being installed. That is a waste of money when these houses had open fires. I spoke to a lady in another village who was upset because the council told her that it is going to revamp her house and that a similar system is going to be installed. She explained that all she wants is her little fire, which is very cosy and gives her satisfaction when she puts it down and keeps it going all night. All she wants is to be left the fire. This is a waste of funds when we could be turning houses around much quicker. Some people just want homes. They do not want to be roasted inside them. While there may be more heat out of a heat pump, the electricity bill might be more across the year because the electricity has to be left on longer.

We are wasting money in certain instances that we could better spend elsewhere. A house in Marian Terrace in Killarney was vacant for five years. It costs way more to put in heat pumps and do all the work relating to them rather than to just do the necessary things to ensure people are comfortable and that their houses are painted and can be lived in. Doing this extreme revamping of heat systems was the Green Party's idea. However, that party is no longer in power. I am asking the Government to take over and ensure that money is not wasted in this regard.

Money is being wasted in Fossa in terms of work to narrow the road there. On the N72, starting out on the Ring of Kerry from Killorglin, two vehicles now cannot meet. The footpath and the cycleway are wider than the road. Work is ongoing there. When you are held up there; you would often look and size it up. You could drive down the inside of the road up on the footpath and on the cycleway with any kind of car or vehicle. It is way safer, and there is more room than there is on the carriageway.

Things like that are happening and are causing problems for many people.

Paschal Donohoe (Dublin Central, Fine Gael)
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I thank everyone who contributed to this debate. I took careful note of the points the 24 speakers have made. I will begin by thanking Members from the Government benches and elsewhere who voiced support for the Bill and who recognised the important role the local property tax plays in supporting public services and funding local authorities. I appreciate their support. As that support is a given I will spend much of my time dealing with the different critiques that have been made of this legislation and the local property tax.

There were six main areas of criticism: first, that the charges are unaffordable; second, that not enough power resides with the local authorities; third, that local authorities do not have enough money; fourth, that the Bill is not progressive; fifth, people criticised how local authorities are funded, particularly in the context of the equalisation fund; and, sixth, the role played by investment funds and private capital was criticised.

I will begin with the third point, namely that local authorities do not have enough funding. As I do so, I am very conscious that there is a protest taking place outside the Dáil. Members of the Opposition parties are going out to address those taking part and calling for more to be done on funding. On one hand, we are saying that local authorities need more money and that more money needs to be spent on housing, but then the same speakers who make that charge argue the local property tax should be abolished. I put it to the House that it is difficult to do both. One cannot argue that local authorities should get more money and at the same time argue that the local property tax that helps fund them should be abolished. The argument will then be made that we are collecting taxes in other areas, but those taxes are being spent. They are being spent on public services as matters stand, so you cannot double count it. People cannot say that they want to get rid of local property tax and that things can be funded from other taxes we are collecting when those other taxes are already being used to fund public services and when the Opposition often states that there need to be more public services paid for out of those taxes. I put it to the House that there is a real case of wanting more of something – and we all want more houses and services to be coming out of our local authorities – and then people wanting to abolish a tax that helps pay for what they are seeking. I do not think that is credible. The country has already seen through it. When we face so many challenges in our society and when we need to fund public services better, the argument put forward does not stand up to scrutiny.

Second is the idea that the local property tax is unaffordable for many and that is an unfair charge. Let me acknowledge, as I have done on many occasions, the impact that inflation is having and that cost-of-living difficulties in recent years have had and continue to have on so many. However, at each point at which the re-evaluation of the local property tax has taken place, real efforts have been made to ensure that as we ask people to pay more - and pay more with regard to their homes, which is always a sensitive point - we have made great efforts to try to ensure that the additional charge is affordable and is below the rate at which the value of homes has increased. This Bill continues that approach. We have widened the bands and cut the core rate of LPT to ensure that the vast majority of homeowners will still be within the same local property tax band that they were in the past. While this does mean that even if the band they are in remains unchanged they will be asked to pay a higher local property tax charge, by widening the band and reducing the rate the Government has made great efforts to try to help ensure that the additional local property tax charge that will result from this Bill will be affordable for as many people as possible.

Third, we have heard the criticism that there is not enough power residing with local authorities. I accept that we have to make more decisions and look at how we can make local authorities even more autonomous and powerful. My colleague the Minister for housing and local government, Deputy Browne, is looking at issues relating to this and is conducting a review. However, there are few things that will contribute more to the underdevelopment of local authorities in the time ahead than abolishing the tax that local councillors have a say in spending part of. One of the reasons we had to make a decision to ask the Oireachtas to consider this Bill more quickly is in order that we can fit in with the needs of local authorities, from a public consultation perspective, so that their views can be considered on how the local property tax can be spent. On the one hand, I have heard calls from many saying that local authorities need more power but, on the other, when it comes to the tax that gives them more power than many other taxes that this House considers and legislates for, those same people are against it. I look forward to debating that inconsistency on the later Stages of this Bill.

Fourth, there is an idea that the local property tax is not progressive. In particular, the point is made that even if it takes account of the value of a home, it does not take account of the income associated with that home. I accept that this is an important point. It is the reason we have waivers in place and why this Bill increases the income thresholds by which some can access waivers. The latter is because we appreciate that for those on low incomes, this can be a very difficult tax to pay. However, the value of a home when this tax is revalued is a very credible effort on the Government’s part to examine how we can ensure the amount of the local property tax charged relates to the income somebody may have. We know that can break down at times because, as some Deputies stated, the value of a property does not correlate to income. That is the reason why we have waivers in place.

Fifth, I heard criticism of the operation of the tax and, in particular, the operation and maintenance of the equalisation fund. I want to make the point again that every euro that is collected in this tax goes back to the payment of public services at either local or national level. While I have heard criticism about the operation of the equalisation fund and the fact that local authorities should be able to keep more of the money that is collected at local level for local use - I heard that point being made by many - it is still important to emphasise that all of the local property tax that is collected is used to fund public services either at local or national level.

Sixth, I heard the criticism again of investment funds - the so-called vulture funds. Those who make that charge - and this is a debate in which I have participated over many years - appear to suggest that there should be no role for private capital in the funding of new homes in our country. When we talk about private capital, all we are talking about is the savings that are held in other parts of the world playing a role in delivering more homes here.

Those are some of the key points that emerged from the 24 contributions on the Bill we heard in the past couple of hours.

No tax is perfect. There are always drawbacks and criticisms of any tax, but this tax, overall, plays an important role in the funding of local government in our country and the delivery of important services and infrastructure. The Government continues to be very conscious of the challenges of the cost of living and affordability. With the changes we are making, we aim to recognise the challenges that many are facing.