Tom Hayes (Tipperary South, Fine Gael) | Oireachtas source

The introduction of the local property tax is part of a broader approach to the taxation of property which aims to replace some of the revenues from transaction-based taxes, which have proved to be an unstable source of Government revenue, with an annual recurring property tax, which international experience has shown to be a stable source of funding.The Government decided that the local property tax should be centred on the principles of equity, transparency and simplicity and that a universal liability should apply to all owners of residential property with a limited number of exemptions. Limiting the exemptions available allows the rate to be kept to a minimum for those liable persons who do not qualify for an exemption. Senators will appreciate that reliefs and exemptions have costs which have to be paid for and their introduction must be considered only where there is a clear economic and social policy need to be addressed. Even with the limited number of exemptions available under the legislation, I understand exemptions were claimed in respect of 41,000 properties in 2014.

Properties in managed estates to which management fees apply will have been purchased by their owners in the knowledge that they would be taking on commitments to fund and partake in the management of the estate and that it was the intention that many such estates would not be taken in charge by local authorities, nor would it be appropriate for local authorities to do so. Management fees in these estates can include services such as refuse collection, maintenance of common areas and a sinking fund for certain repairs to the buildings, depending on circumstances. These are costs which home owners in other households, particularly in rural areas, must fund for their own properties. In certain circumstances, private estates will be taken in charge by local authorities in accordance with the relevant section of the Planning and Development Act 2000, as amended. This is a matter for the Minister for the Environment, Community and Local Government and the relevant local authorities.

Revenue from the local property tax accrues to local authorities and supports the provision of local services. Local authorities provide a broad range of services in the public realm, which benefit the wider community. The proper functioning of these services is important for the well-being of every community and household. They include fire and emergency services; road maintenance and cleaning; street lighting; spatial and development planning and other similar services; regulatory and inspection functions and business support services; and libraries, parks, and other recreation and cultural public amenities. The benefits of these services accrue to all members of society.

A requirement to pay management fees is not relevant in determining whether a property is subject to the local property tax. Accordingly, while those who are liable for management fees to property management companies may be exempt from local property tax for another reason or may be entitled to avail of a deferral arrangement under the provisions contained in the legislation, there is no specific exemption for the payment of management fees. There are no plans to change the basis of liability to the local property tax.