Robbie Gallagher (Fianna Fail) | Oireachtas source

The Minister of State is very welcome and I thank him for taking time out of his busy schedule to be here. I want to discuss the Government's decision to defer the recommendations from the review of the local property tax, LPT, and the implications that may have for pensioners and those on low incomes. A review of the controversial tax on homeownership, the local property tax, LPT, recommended that the Minister for Finance, Deputy Donohoe, increase the threshold for deferring property tax to ensure that pensioners were not excluded because of the rise in their weekly pension incomes. However, the Government has failed to bring forward any reforms to the local property tax. One could be cynical and suggest that is for political reasons due to the forthcoming European and local elections but I will await the Minister of State's comments on that.

There are serious consequences for the Government's inaction on property tax. Many low and fixed-income households will no longer be able to defer the property tax when it is due. As the Minister of State knows, a couple who are both on the maximum State pension of €248.30 per week, which gives them a total annual income of €25,800, are now above the threshold to qualify for deferral which was €25,000 for a couple. It appears that the message to pensioners now appears to be that it is tough luck but they have to pay up.This is a particularly mean approach by the Government. It does not cost it anything to allow those on modest incomes to defer. Homeowners can currently defer their property tax charge if their income is below €15,000 for a single person or €25,000 for a couple. The property tax review recommended increasing this threshold to €18,000 for a single person and €30,000 for a couple. It appears the Minister's review of the controversial tax dismissed several proposals which would have made life easier, particularly for pensioners. Waivers for homeowners on low fixed incomes and people with disabilities were suggested. Both were rejected. The review group also dismissed a proposal to give property tax relief to people over 80 with long-term illnesses, despite this measure being previously recommended in a Government report. The report also ruled out cutting interest rates charged on property tax deferrals, which are mostly availed of by older people.

Approximately 328,000 people, mostly older people, are eligible for the deferral scheme but only a limited number take up the option. The possibility is that, as this is a relatively new tax, they might not be aware they are entitled to put off the payment. More needs to be done on this. Over 56,000 homeowners chose to defer their property tax last year. A deferred payment incurs a 4% interest rate annually which is permanently fixed as a charge on the property which must be paid on the sale or transfer of the home. As it is a relatively new tax, people need more information as to how the deferred payment system works. An information campaign is needed. Many people, including older people, have a fear of Revenue and are afraid to seek a deferral. I would hate to think that older people are stretching themselves just to pay a property tax when they may not be aware a deferral is available to them.

It is disappointing that many of the recommendations of the review into the property tax have not been implemented. Many of its good and worthwhile suggestions would have assisted those on low incomes and in financial hardship to be outside the property tax net. Unfortunately, that has not been the case.