Brian Hayes (Dublin South West, Fine Gael) | Oireachtas source

These amendments deal with the issue of negative equity and the proposals by Senators Reilly and O'Brien to exempt the properties of those in negative equity. Obviously, we considered this issue, but were guided by the recommendations of the Thornhill report, which was the initial report for which the Government asked before coming to a full decision on this. The report made it clear that deferral systems are a better way to go. It is worth putting on the record of the House that this does not apply to people with incomes of less than ¤15,000 and couples with incomes of less than ¤25,000. There are strong sections within the Bill which allow people in negative equity to defer this charge and tax until such time as they are up on their feet again. We have gone down the route of deferral as a means of helping people in negative equity.

It is worth pointing out that one of the promises my party gave at the time of the last election, which was supported by the Labour Party, was for an increase in mortgage interest relief for people who bought houses between 2004 and 2008 to recognise the fact that this cohort of the population was badly affected by negative equity. We delivered that in our first budget. I am not suggesting that this has made a huge difference to people's personal income, but it has made some difference and is what we said we would do during the last election. We are conscious of the difficulty experienced by people in negative equity.

That is why the deferral system is in place.

We have done everything in our power to keep the rates low. Senator Michael D'Arcy has stated the rate is 0.18%. We have given a commitment that neither this rate nor the position on valuations will change during the lifetime of this Parliament. As a result, there will be certainty for those who must pay six months worth of the tax this year and a full year's worth in 2014 in the context of what they will be facing. Some 80% of people live in homes with a valuation of ¤300,000 or less. If one took the latter amount as being the maximum, those in the cohort to which I refer would pay a charge of ¤540 per year.