Seanad debates

Wednesday, 1 July 2009

1:00 pm

Photo of Brian Ó DomhnaillBrian Ó Domhnaill (Fianna Fail)

I welcome the Minister of State to this discussion on the Local Government (Charges) Bill. Members have offered their views on the legislation and the generic view appears to be that everybody welcomes the Bill. It is an important Bill, particularly for local authorities that have large numbers of second homes. A table provided by the Oireachtas Library and Research Service indicates where the largest numbers of second homes are located. Obviously, Dublin has the largest number while Donegal is third on the list, with between 22,500 and 23,000 second homes. They would yield, as Senator Pearse Doherty mentioned, over €4.5 million. That is a substantial amount of money coming into the revenue base of a local authority.

This is the first property tax, if one can call it that, to be imposed in Ireland since 1978, when local authority rates were abolished. I generally welcome the legislation. When I was a member of the local authority in Donegal in 2004 and 2005 I sought the introduction of a charge on holiday homes. It was one of the recommendations in the Indecon report on local government financing. I was delighted the Government reacted to that report in the budget last October with its announcement of the €200 levy on second homes.

To clarify the figures being used, it appears the Department's estimate of €40 million income from the levy is based on figures from the Private Residential Tenancies Board. It does not take account of the census 2006 figures. Data compiled by the Oireachtas Library and Research Service suggest there are 487,000 properties eligible for payment under the Bill, which would generate substantially more than €40 million. It could be double that amount. Perhaps we will be given clarification of the figures.

There has been discussion of exemptions under the legislation. I wholeheartedly support the exemption for mobile homes proposed by the Minister. While I have not said anything publicly to date on the matter, in recent days I have been in consultation with mobile home site owners and the owners of mobile homes. In Donegal, families own mobile home sites and rent them to individuals who own mobile homes. It was unclear whether the mobile home owner or the site owner would pay the €200.

I received information from mobile home owners concerning the value of a mobile home. Depending on the standard, it costs €30,000 to €40,000 to buy a mobile home whereas a holiday home will cost perhaps ten times that amount. There can be no comparison between paying €200 for a mobile home and paying the same for a holiday home. The depreciation of a mobile home is even more rapid than that of a car, and regarding holiday homes in general, the price of property tends to increase rather than fall. I am glad the Minister is bringing forward the exemption. I know it will be welcomed across the board.

I wish to refer to the other exemptions. I agree with other speakers regarding the self-catering sector. Those involved tend to pay a registration fee of approximately €200 for their property to Fáilte Ireland and are now being asked to pay an additional €200 per year. Some of the self-catering businesses act as businesses, filing their returns to the Revenue Commissioners and these also pay commercial rates for their properties. When a self-catering operation pays commercial rates perhaps there should be a mechanism whereby it does not have to pay this fee which is, effectively, a double charge.

The Minister referred to situations in which an exemption can be made for certain heritage properties. I am not sure what is the definition of a heritage property. A number of individuals have been in touch with me who have what they describe as heritage properties, namely, properties with thatched roofs. Perhaps nobody lives in the properties but the cost of their upkeep is quite substantial. I ask the Minister to consider whether properties of this nature might be included under the category of heritage properties so they could be deemed exempt. I am sure there are only some dozens of such properties around the country. The postcard picture of Ireland in the United States always depicted as the thatched cottage and we should not attack it by imposing this charge. I spoke to two such property owners in County Donegal today who said that if the charge were imposed they would probably knock down the property which, in any case, is almost valueless. The only value is in the thatched roof and there is a grant available from the Department towards that. We should be careful not to attack that very important piece of heritage and should protect it.

Another issue to which I wish to refer is that of collection and administration of this charge. According to the legislation, this will be a matter for the local authorities and the Bill emphasises that collection and enforcement will come from the local authorities. I welcome that because it is probably more beneficial to have the collection locally. We must ensure there is liaison between the Department and the local authorities so that there is a collaborative response in terms of whether additional resources are required.. Perhaps the additional resources may come from the actual revenue stream but this should be teased out with the Department.

I do not agree with using the electoral register as a basis for collecting moneys or gaining access to information on properties until such time as the electoral register is linked to the PPS numbers. At such a time it can be guaranteed.

I come from a Border county where there is an issue regarding the collection of moneys from individuals resident in the North of Ireland who have holiday homes in Border counties. How will we ensure there is a legislative footing to collect those moneys? It is important this should happen because if we do not have such a legislative mechanism, there will be a kick-back from people who live in this State. I am sure this was thought out prior to the drafting of the legislation.

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