Brian Ó Domhnaill (Fianna Fail) | Oireachtas source

This is a timely debate. A debate on taxation at present is opportune for everybody, including the Department of Finance, due to the chill winds that are blowing across Europe and across the Atlantic. They will have an effect on the Irish economic footprint over the next number of years. The most recent figures from the Department of Finance show that the deficit this year has increased compared with the deficit up to the end of April 2017. There is a budgetary deficit of €3.4 billion this year compared with a €2.5 billion deficit last year. In that context we must be very careful about discussing the elimination of taxation measures in the State. We see what is happening in Italy at present and the repercussions that will have not only on the euro but also on companies that have invested in Ireland. Things that are happening worldwide will have consequences for Ireland.

The objective of the local property tax was to widen the tax base. It has done that, but was it fair? It probably was not. It is based on the 2013 valuations. According to the CSO, average property prices increased by over 56% up to the end of 2017. If that pattern were to continue up to the end of 2019 when the revaluations are due there could be an increase of over 70% on the valuations of property. That is not universal across the board. Those are the CSO figures but most of the increase has occurred in Dublin and the other urban centres. However, I have done the mathematics on what that will mean for property tax yield. It will probably mean an increase of approximately €400 million on the €486 million that was taken in last year, so it is approaching €1 billion. Would the economists in the Department of Finance want to see that tax removed? They certainly would not.

However, is the tax fair? That is one of the criteria used to determine a tax, along with the simplicity of the tax. It is not fair. It impacts negatively on a pensioner who has a valuable property and is living on the old age pension in Senator Horkan's constituency. The fairness of the tax is probably why he put forward this motion. One of the crucial criteria for a government when crafting a taxation measure is the fairness of the tax. The blueprint in this motion should be taken on board by the Government and should be filtered into the review that is currently taking place, as was promised by the Minister for Finance, Deputy Donohoe, to try to provide some level of reassurance to people who are worried at present. Ultimately, we could see a flood of valuable properties coming onto the market from people who will not be able to afford to stay in them because the property tax will increase so much.

My wife is Canadian. I am seeking to put matters in perspective in case people think the property tax is terrible here. The tax in Canada is €5,000 for a small bungalow in certain provinces, and it is a provincial rate that applies there.