Kathryn Reilly (Sinn Fein) | Oireachtas source

I move amendment No. 3:

In page 3, before section 2, to insert the following new section:?2.?The Principal Act is amended in section 2 by substituting the following for the definition of ?chargeable value?:

? ?chargeable value?, in relation to a relevant residential property, means the price which the unencumbered fee simple of the property might reasonably be expected to fetch on a sale in the open market were that property to be sold on the valuation date in such manner and subject to such conditions as might reasonably be calculated to obtain for the vendor the best price for the property and with the benefit of any easement necessary to afford the same access to the property as would have existed prior to that sale, net of any outstanding liabilities on the mortgage of the relevant residential property;?.

I also wish to speak to the section in respect of amendments Nos. 1 and 2, which were ruled out of order. The Minister of State referred to recent ESRI research and suggested that the property tax has the advantage of being six times more job friendly than taxes on work and income. However, I argue that it is unfair and non-egalitarian because it contains only the tiniest element of taxation according to one's ability to pay. He noted that it is a type of wealth tax but, as I pointed out in my contribution to the debate in December, we are only taxing the house or the family home as opposed to the wider legal definition of property that would be encompassed by a wealth or assets tax. Even if this tax is more friendly to the domestic economy than a tax on income or work, how many additional people will it tip into mortgage arrears? The Taoiseach and the Tánaiste, in reviewing the programme for Government today, stated that they want most families on mortgage arrears to be offered a sustainable solution by next year. What will this tax on debt do for people who are in mortgage arrears?

Amendment No. 3 is grouped with amendments Nos. 6, 10 and 17. This group of amendments is designed to exclude certain categories of properties and persons. Amendments Nos. 3 and 6 seek to include liabilities arising from negative equity in the chargeable value under the terms of the tax. A property tax is meant to be a tax on an asset but people who live in negative equity own a debt not an asset. Given that they cannot realise any value from their property, they will be paying tax on their debts. This amendment would ensure that when a property is being valued the negative equity is deducted from the current market value. Amendment No. 6 re-emphasises this point, while amendment No. 17 repeats the proposition.

It says something about the Government if it believes it acceptable to tax a debt rather than an asset. The family home tax is full of such anomalies. People who live in the private rented sector will end up paying the tax even though they do not own the asset. Local authority tenants will face a similar fate. These anomalies demonstrate that the tax is not a property tax in the normal sense of that term. It is a tax on the privilege of living in a family home, irrespective of whether it is owned or rented, and regardless of whether it has any real value. I will be pressing amendment No. 3 for these reasons.