Friday, 16 July 2021
Finance (Local Property Tax) (Amendment) Bill 2021: Second Stage
As we had a good discussion about this at the finance committee last week, I will be brief. First, it must be acknowledged that this review has probably been long overdue, since 2013. I say that in relation to the revaluations. The longer we leave revaluations to be carried out, the harder it becomes to bring in the change. The other significant thing is that this Bill brings into the tax net more than 80,000 properties on which property tax has not been paid since 2013. Anybody who has served on a local authority and who has tried to balance the books on an annual basis will know that had that money been available, it might have allowed councils to defer the property tax increases of up to 15% that they have experienced.
We also had a good debate with the Minister. While the Minister is only collecting it, one of the huge issues around property tax is how it is distributed afterwards. We know the 20% equalisation fund will be phased out over the period. However, the whole argument is on the baseline figure of the Department of Housing, Local Government and Heritage, and on the self-funding element the Department uses an ongoing basis. The local property tax was introduced to restore local democracy, to make councillors responsible for their decisions and to have them in charge of their spending. When they lose the top 20% - and probably another 30% or 40% - based on baselines and the self-funding element, realistically we are not restoring that democracy. There is an opportunity there because there is a commitment from the Government that the top 20% will not be in existence any more after this year.
The Minister of State can come back on this but is this a change to the definition of a residential property? A number of people have been on to me about the definition of an acre, as well as about which structures on that acre are valued and which are not. Much of it comes down to whether it is of benefit to the residential dweller. Is it of benefit to their enjoyment in respect of that residential development? The specific question I was asked was in relation to Covid-19. We have seen many instances of people building offices or converting sheds outside into offices. Is that considered to be adding to the residential enjoyment or is it not? Could the Minister of State tease out some of the details of the exact definition during the process?
I will probably come in again later on during the amendments.