Friday, 16 July 2021
Finance (Local Property Tax) (Amendment) Bill 2021: Second Stage
Seán Fleming (Laois-Offaly, Fianna Fail)
I am pleased to see the senior Minister, Deputy Donohoe, has arrived. This shows the importance attached by the Government to this legislation as we wind up the session before the summer break. Various issues that have been raised and will be discussed with the Minister, Deputy Donohoe, on Committee Stage, which will be commencing in a few moments. I will make some observations on what has been said and on some of the points that have been raised.
This has been a very useful, important and interesting debate. Many of the issues raised here are probably matters which relate to the Department of Housing, Local Government and Heritage such as use of funds and equalisation. Our role is to collect the tax and many of the policy issues that have been discussed here in respect of local authorities would be for the Minister, Deputy O’Brien, in that Department, which Members will understand. Having said that, these issues impinge directly on the debate around local property tax and I will comment on them as much as I can.
Senator Casey mentioned the question of the equalisation fund. Members are coming to that issue from very different and diametrically opposed perspectives, which is fine and which is what a national Chamber should be about, and it is important to recognise that. There are changes, however, in that the funds collected will now remain locally. The obvious question then being raised today is whether there will be a shortfall for the local authorities which were the beneficiaries of the equalisation fund. There was a commitment in the programme for Government to deal with this. This was a commitment to strengthen transparency and accountability which may result in additional costs to the Exchequer in the absence of other changes. There is a commitment there then that there will be cost to the Exchequer if other changes are not introduced in respect of the equalisation fund. The intention here is not to penalise any local authority which will lose out as a result of this change.
The acre was mentioned. In many pieces of legislation things get legs during the course of a debate and the main issue here was to transfer this measurement to one we all know as all land measurements are now per hectare. All that is being required in this legislation, by and large, is to transfer this measurement to hectare. People felt that that change was needed and it is still equivalent to the old acre. I do not know if that is an Irish or English acre but whatever was understood to be an acre continues to be the case and is now being defined as 0.404686 ha.
Another question raised was about properties that had 4 or 5 acres or more than 1 acre attached to them. Logic tells one that the piece that forms part of the valuation is the land immediately around or abutting the house, including the driveway to the house. If someone has 3 acres out the back for grazing a pony this should not be substituted for the valuable property and the driveway. This is common sense and it is right to have this issue tidied up. In case there is any doubt on this point, 99% of people know that the land immediately abutting the house was the relevant portion. This just clarifies that one cannot substitute that more valuable piece of land, including the driveway in and out of the house, with the valuation for 3 or 4 acres that one might have adjoining the property which would have a much lower value in order to bring down the property value. Common sense prevails here. This is an important point of clarification and there is nothing more to it than that.
Senator Casey also raised the issue of the definition of residential property where some people may have converted some of the property to an office.Revenue will come forward with clear guidelines on that well before the evaluation date, once the legislation is enacted.
Senator Kyne mentioned the equalisation fund. He mentioned the timing of allocations to local authorities. Again, that is primarily a housing and a local authority debate. We understand the issue of timing, but most local authorities and chief executives are in consultation with the Department and can prepare their estimates in reasonable time on an understanding of what might come. They might have to be changed afterwards, but some local authorities get their estimates done very quickly, well before Christmas, while others take much longer. I would say to Senator Kyne to ask the local authorities that get their estimates through. The Senator said the valuation date for the local property tax is earlier than the estimates meeting. That has to be the case because the valuation date is 1 November and Revenue has to be in a position immediately after that to issue the new amounts people should pay by single payment or through the payroll system, which some people have to do, and an extra lead-in time is needed for that.
Senator Gavan opposes the tax, and his views on that are well known. He mentioned the equalisation fund and the deferral. This is good legislation. We are reducing the interest rate on deferred payments from 4% to 3%. That is significant. We are making the process better and more helpful. There are arrangements in place to defer a portion of the tax, not all of it, depending on income limits. We are increasing the income limits by which up to now if one was above a certain income one could not defer, so we are making improvements in that area. I know the Senator will be pleased to hear that, even though he opposes everything we are doing today.
Senator Higgins mentioned a number of issues, mainly vacant houses. That will come up on Committee Stage. We are collecting the information for statistical purposes only, and that is what is in the legislation. The Senator wants to know why the houses are empty, which is much more information. I suggest honestly that if we were to do what she suggests - and I think she will take this in good spirits - I believe she would be one of the first to say we were breaching data protection guidelines on information relating to individuals.