Paul Bradford (Fine Gael)
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I thank the Minister for coming to the House this evening to respond to my contribution on the household charge. Following the decision to introduce this tax, there is great maturity and acceptance among the majority of the Irish that the country and local government must be funded. While no one wishes to pay taxes, there is significant and substantial take-up of this tax.

I have a few queries regarding the operation of the scheme. It is important that we try to clarify any anomalies that might emerge and ensure people know exactly who is and is not obliged to pay the tax. Will the Minister clarify the position with apartments and bedsit units, particularly single bedsit units in a house? My understanding is that if separate kitchen facilities are provided, the charge is applicable but if there is some type of central cooking or dining area, it might be different. I would be obliged if the Minister would clarify the position in that regard.

Second, will the Minister clarify the position concerning the non-principal private residence or second home charge? I have received a number of queries from people who claim they are unable to get a precise and immediate response from the Department. Will the Minister confirm that people who are eligible to pay the €100 household charge must pay not only that charge but also the tax on the second property, if they have such a property?

I believe people are now buying into the household charge, not because they wish to but because they know they must. I have come across a number of cases where people realise that an older or disused house should have previously been subject to the non-principal private residence tax of €200 per year. They are now worried that they should have paid the €200 per annum two or three years ago. I understand there is a €20 per month levy or fine for not doing so and they are worried about coming forward. Is there any possibility that the Minister could make some arrangement to encourage those people to regularise their affairs? Of course we cannot mention the word "amnesty" any longer, but perhaps some arrangement could be made to assist those people.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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A former era.

Paul Bradford (Fine Gael)
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The word is from a former era. It will be an arrangement rather than an amnesty.

My colleague, Senator Walsh, when he realised this matter was being raised, brought it to my attention that we might get some clarification on the issue of people who are currently residing in Britain, for example, but who own a house in Ireland which is let to tenants. Do they pay both the household charge and the non-principal private residence charge? They are not living in Ireland, so it is not their second Irish property. What are their obligations?

That covers the questions I wished to ask. I welcome the fact that this scheme is up and running and that there is a mature and positive response from the public. However, if we tie up the loose ends and remove the doubts, it will be easier for everyone.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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I thank Senator Bradford for giving me the opportunity to clarify the issues he raised. The EU-IMF programme of financial support for Ireland commits the Government to the introduction of a property tax for 2012. The programme reflects the need, in the context of the State's overall financial position, to put the funding of locally delivered services on a sound financial footing, improve accountability and better align the cost of providing services with the demand for such services.

In order to meet the requirements in the EU-IMF programme, the Government has introduced the €100 household charge in 2012. The charge is an interim measure and proposals for a full property tax will be considered by the Government in due course. The Local Government (Household Charge) Act 2011 and the Local Government (Household Charge) Regulations 2012 provide the legislative basis for the household charge. The Local Government (Charges) Act 2009, as amended, and associated regulations provide the legislative basis for the charge on non-principal private residences. Under the legislation, owners of residential property are liable to pay the household charge, including those persons with a liability to pay the charge on non-principal private residences by the due dates, unless otherwise exempt.

Both the Local Government (Household Charge) Act 2011 and the Local Government (Charges) Act 2009, as amended, contain the same definition of residential property. Sections 2 of both Acts provide that the residential property means a building that is situated in the State and that is occupied, or suitable for occupation, as a separate dwelling, whether the occupier shares, or would be entitled to share in connection therewith any accommodation, amenity or facility with any other person, and includes a house, maisonette, flat or apartment, including the form of accommodation commonly known as a bedsit.

The charge on non-principal private residences and the household charge are payable on each unit of accommodation that is occupied, or suitable for occupation, as a separate dwelling. Thus, the owner of a building which is divided into a number of flats or bedsits is liable for the charge on non-principal private residences and the household charge on each such unit in that building. The household charge and the charge on non-principal private residences are on a self-assessment basis and it is a matter for an owner of a residential property with a liability to either or both charges to declare that liability and to pay the relevant charges by the due dates.

The income from the household charge and from the charge on non-principal private residences is used to pay for essential local services. I am conscious that people, genuinely and through no fault of their own, might have deemed themselves not to be liable for the second home charge. I will introduce new arrangements whereby I will be in a position to stem the penalties that have applied since then and allow them to enter into an instalment arrangement with the local authority in order that they can discharge their liability. This will ease the financial pressure of having to pay a lump sum to deal with their compliance with the law in this area.

I have recently established an expert interdepartmental group to design an equitable property tax having regard to its terms of reference. This group has been asked to report to me by the end of April 2012. I will then bring proposals to Government for decisions on the structure and modalities of the property tax to replace the interim household charge. I agree with the Senator that the current household charge is a flat rate charge which is not progressive or fair. That is the reason I will bring forward proposals arising from the interdepartmental group for implementation in 2013.

Paul Bradford (Fine Gael)
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Could the Minister reply to my question about houses that are owned by Irish people who are living abroad?

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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I will revert to the Senator with that clarification.