Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

The local property tax, LPT, is designed to provide a more sustainable system of funding for local government and place the provision of local services on a sounder financial footing. It will lead to greater transparency and accountability at a local level and it is certain that the stronger democratic relationship and clearer lines of accountability created can only have a beneficial impact on service provision from the perspective of the service user. The level of income forecast to be collected by the LPT in 2015 is in the region of €440 million. Under the terms of the Stability and Growth Pact, Ireland may not introduce discretionary revenue reductions unless they are matched by other revenue increases or expenditure reductions. This means that the Government must consider carefully any tax changes as any reductions will have to be offset elsewhere.

The Finance (Local Property Tax) Act 2012, as amended, provides that any property that is in use as, or that is suitable for use as, a dwelling house is liable to the local property tax. Therefore, the condition of a property is not relevant where the property is actually occupied as a dwelling house. Where a property is not occupied and is in such bad condition that it is not suitable for occupation as a dwelling house, it is not liable to the LPT. I am advised by the Revenue Commissioners that it is not possible to provide a prescriptive set of criteria that a property must meet to be treated as not suitable for occupation as a dwelling house.

As the LPT is a self-assessment tax it is up to a property owner to assess whether a property is liable or not, and to assess the chargeable value of the property where it is liable. In cases where the property owner assesses a property as non-liable due to its being unsuitable for use as a dwelling or assesses a property at a reduced value because of fire safety or other structural issues, Revenue will consider the facts and circumstances of the particular case. The LPT operates on a self-assessment basis and it is a matter for the property owner, in the first instance, to calculate the tax due based on his or her assessment of the market value of the property. When making an assessment, issues such as serious defects relating to building and fire safety regulations would be one of the factors that a property owner should take into account in valuing the property.

In the circumstances, I do not propose to accept these recommendations. The passage the Senator quoted from a newspaper is strange. The collection rate on the property tax is 97%. It is very hard to say that a tax collected at 97% of assessed value is on life support. It seems to me to be one of the stronger taxes.