Wednesday, 6 March 2013
Finance (Local Property Tax) (Amendment) Bill 2013: Second Stage
The Finance (Local Property Tax) Act 2012 was enacted into law, following its signature by the President on 26 December 2012. The Minister for Finance, Deputy Noonan, signed the commencement order bringing the Act, other than sections 19 to 21 inclusive, into operation with effect from 1 January 2013. Sections 19 to 21, inclusive, which relate to the local adjustment factor, will come into operation with effect from 1 July 2014.
The introduction of the Act met one of our programme commitments to the troika, which had to be completed by the end of 2012. Senators will recall this commitment was entered into by the previous Government. Given this troika commitment and the Government's determination to fix the national finances in a manner which supports job creation, we have chosen to implement the local property tax. The local property tax will keep taxes on jobs, such as income tax, unchanged. Recent ESRI research shows that a property tax has the advantage of being six times more job friendly than taxes on work and income. This Government is determined to do everything in its power to protect and support the creation of jobs. Yesterday's employment figures for the last quarter of 2012 were encouraging, representing the first annual increase in employment recorded since 2008.
This Bill is now being introduced to give effect to commitments that the Minister made during the passage of Finance (Local Property Tax) Bill 2012 through the Houses last December, in addition to some further issues that have since been raised as well as some minor technical amendments.
Before I go through the Bill in detail, I wish to draw the House's attention to the key positive amendments contained in it. I also wish to point out, in response to some comments in the Lower House, that the Revenue Commissioners are legally independent in the operation of their duties, which will include the administration of the local property tax.
The Minister for Finance has agreed with his colleague the Minister for the Environment, Community and Local Government, Deputy Hogan, that houses demonstrated to be subject to a certifiable level of pyritic heave should receive an exemption from the local property tax. The exemption may be claimed for three consecutive liability dates. The Minister for the Environment, Community and Local Government will provide regulations stipulating how residential properties should be tested for pyrite-induced damage. These regulations will also provide for the issue of a certificate in respect of a property that has been verified as having a level of damage significant enough to warrant exemption.
The Government is conscious of the difficulty some homeowners are experiencing in meeting their mortgage obligations. Under new proposed amendments, a person who has entered into an insolvency agreement - that is, a debt settlement arrangement or a personal insolvency arrangement under the Personal Insolvency Act - may qualify for a deferral of the local property tax that falls due for payment by that person during the period for which the insolvency arrangement is in effect, where a valid claim is made to the Revenue Commissioners. Further proposed new measures provide for the possibility of a deferral for owners who cannot pay the local property tax, when it becomes payable, without excessive hardship as a consequence of a significant and unexpected financial loss or expense. This deferral will operate on a different basis from deferral arrangements provided for in the original Act. A person must apply in writing to the Revenue Commissioners for the deferral and meet the criteria set out in guidelines to be published by the Revenue Commissioners. Deferral cannot commence until the Revenue Commissioners have received whatever information and documentation they require to make a decision and, having made that decision, notified the owner that a deferral is allowed subject to whatever conditions they may impose in accordance with the guidelines that will be published.
The Bill allows for a reduction in the chargeable value of a property that has been adapted for occupation by a disabled person where the adaptation has been grant-aided by a local authority. The reduction is limited to the lesser of the following two values: the chargeable value attributable to the adaptation work carried out on the property, and the maximum grant payable under the relevant local authority scheme. The relief will not apply after the sale or transfer of the property unless the person with the disability continues to reside in the property.
The Bill also provides an exemption for a residential property that is purchased or adapted for use as a sole or main residence by an incapacitated individual where an award has been made by the Personal Injuries Assessment Board or a court or where a trust has been established specifically for the benefit of permanently and totally incapacitated individuals. To be exempt, a residential property must be acquired or adapted to make it suitable for occupation by an incapacitated individual. To avail of the exemption, the adaptation costs must be greater than 25% of the chargeable value of the property before the work took place. The exemption will no longer apply if the property is sold and the incapacitated individual no longer occupies it as his or her sole or main residence.
The Bill allows a personal representative of a deceased liable person, where that person was the sole liable person of a residential property, to qualify for a deferral on making the required valid claim. The deferral may be claimed in respect of local property tax that was due and unpaid at the time of the liable person's death, local property tax that was deferred by the deceased liable person and local property tax that falls due in the three years immediately following death. The Bill limits the period for which personal representatives may qualify for a deferral to three years commencing with the date of death. However, if the personal representative is in a position to transfer the property to a beneficiary or to distribute the sale proceeds, where the property must be sold, the period of deferral ends at that point. In all cases, the personal representative may be responsible for payment of the deferred local property tax when the period of deferral comes to an end.
As previously indicated, properties used for accommodation purposes by groups such as the girl guides or scouts will receive an exemption from local property tax. This is on foot of a commitment given by the Minister for Finance, Deputy Noonan, during the Second Stage debate in response to a proposal set out by Senator van Turnhout, which we welcomed. The Bill now provides for an exemption for residential properties used by a charitable body for recreational activities connected with its charitable purpose where this is not done on a commercial basis.
The chargeable value of all properties for which the liable entity is a local authority or an approved housing body will be deemed to be within the first valuation band for the first valuation period - that is, up to 31 October 2016. Local authorities and approved housing bodies may also defer their 2013 local property tax liability until 2014. This is to allow such bodies to put in place arrangements for the payment of the tax and for the valuation of their properties.
An amendment proposed to deal with issues arising where there is a change of liable person between valuation dates has been the focus of much media and Opposition attention in recent weeks. Where the liable person changes between valuation dates the vendor will be obliged to provide the purchaser with details of the chargeable value that was established on the first valuation date, along with any relevant documentation. Failure to comply may result in the imposition of a fine of Â¤500 on the seller of the property. The new owner is obliged to submit a revised return and chargeable value for the next liability date where it appears to him or her that the chargeable value declared by the previous liable person was too low given the circumstances that would have prevailed at the time that chargeable value was established. These amendments are intended to act as a deterrent against underÂdeclaration of the chargeable value of a relevant residential property by a liable person who intends to sell the property before the next valuation date. Contrary to media coverage and other public commentary, the new provision offers a level of protection for purchasers. In the absence of this amendment a deliberate and serious under-declaration of a property's value could be binding on a new owner or liable person where a property is sold before the next valuation date. This amendment allows the purchaser to advise the Revenue Commissioners of what he or she considers to be the correct market value of the property, and relates only to the tax that would be payable by the purchaser. Any issues with the original value placed on the property would be entirely and solely a matter between the Revenue Commissioners and the former owner.
I will outline the details of the sections of the Bill. Section 1 defines the principal Act as the Finance (Local Property Tax) Act 2012. Section 2 amends Part 2 of the Act by providing exemptions from local property tax for a residential property used by a charitable body for recreational activities connected with its charitable purpose and for residential properties purchased or adapted for occupation by permanently and totally incapacitated individuals. I outlined these new exemptions earlier in my contribution. Section 3 amends Part 2 of the principal Act to provide an exemption for a temporary period of at least three years for residential properties that have been affected by a significant level of pyrite-induced damage. Section 4 amends Part 3 of the principal Act to clarify how it will apply in several situations in which an occupier has not taken steps to establish title on the property.
Section 5 makes several amendments to Part 4 of the principal Act relating to the charging provisions such as valuation of property and the rate of tax to be applied. Sections 5(a) and 5(b) make amendments to section 14 that are linked to an amendment made to section 35. As I stated previously, these amendments are intended to act as a deterrent against under-declaration of the chargeable value of a relevant residential property by a liable person who intends selling the property before the next valuation date. Sections 5(c) and 5(k) are a combination of minor technical amendments and amendments that clarify the operation of the Act with regard to the local adjustment factor. Section 6 proposes to insert a new section 15A providing for a reduction in the chargeable value of a property that has been adapted for occupation by a disabled person where the adaptation has been grant-aided by a local authority.
Section 7 deals with residential properties owned by a local authority or an approved housing body. The chargeable value of such properties is deemed to fall into the first valuation band - that is, from zero to Â¤100,000 - until 1 November 2016, the valuation date for 2017. In addition, the payable date for the 2013 local property tax liability is extended to 1 January 2014. Section 8 makes several amendments to Part 7 of the principal Act regarding the return to be prepared and delivered to the Revenue Commissioners. Sections 8(a) to 8(c) are minor technical amendments. Section 8(d) is linked to the amendments in section 5.
Paragraph (e) substitutes more comprehensive provisions for section 38 of the principal Act dealing with the linkage between late submission of a local property tax return and the submission of a return for income tax or corporation tax. Late delivery of a local property tax return can result in an income tax or corporation tax surcharge under the Taxes Consolidation Act 1997. Paragraph (f) makes a minor technical amendment. Section 9 makes several amendments to Part 8 of the Act as regards estimates and assessments of local property tax made by the Revenue Commissioners. Paragraph (b) will facilitate notification of Revenue estimates by electronic means. Paragraph (c) facilitates appeals where an assessment is made in respect of more than one property. The other amendments are technical in nature.
Section 10 amends Part 9 of the principal Act to allow an appeal by an owner against a determination of the appeal commissioners to be heard by the Circuit Court. This is in line with appeal provisions in other areas of the tax code. Paragraph (c) amends section 63 of the Act so that the appeal commissioners can require a liable person to provide information on any property and not just a relevant residential property.
Section 11 makes several amendments to Part 10 of the Act as regards the deduction of local property tax at source by employers, occupational pension providers and the Departments of Social Protection and Agriculture, Food and the Marine. Paragraph (a) amends the definition of "net emoluments" in section 64 in two respects. First, it gives priority over local property tax to deductions by an employer or occupational pension provider under a court order, such as an order for the payment of maintenance, where such an order was issued before the direction to deduct local property tax was issued by the Revenue Commissioners. Second, it allows deductions of local property tax to be made from a repayment of income tax, PRSI or universal social charge by an employer or occupational pension provider to a liable person. Paragraphs (b) to (g) make minor technical amendments to ensure that the formulation used in several provisions is consistent and clear.
Section 12 makes several amendments to Part 11 of the principal Act in the collection and enforcement of local property tax by the Revenue Commissioners. Paragraph (a) amends section 119 to clarify that local property tax is due on a liability date but may be paid on or before a subsequent date. For example, the liability date for 2013 is 1 May but initial payments may be made on or before 1 July. Similar provisions will apply in respect of future years. Paragraph (b) amends section 120 in relation to a direction given by the Revenue Commissioners to employers, occupational pension providers and the Departments of Social Protection and Agriculture, Food and the Marine to deduct local property tax at source when making payments to a liable person.
New subsections (2) and (3) disapply the requirement for the Collector General to issue a demand for outstanding tax when such a direction is given and allow the direction to be given after the local property tax is due but before it is payable. However, tax need not be deducted until it is payable. Paragraphs (c) and (d) are intended to clarify the original provisions. Paragraphs (e) and (f) insert a new subsection (2) into section 126 to require a liable person who sells or otherwise transfers a relevant residential property after local property tax is due but before it is payable to pay that tax on completion of the sale or transfer. Paragraphs (g) and (h), which were introduced by a Committee Stage amendment in the DÃ¡il, provide that any local property tax liabilities that were not established before a sale of a property will not be a charge on the property for the new owner. Instead, the Revenue Commissioners will pursue the previous owner for payment of such liabilities. However, such liabilities will continue to be a charge on the property where the new owner does not submit an honest opinion on the market value of the property to the Revenue Commissioners when required to do so on the first liability date following the sale. Paragraph (i) inserts a new section 147A that establishes a way of determining a liable person's local property tax liability for the purpose of charging a tax geared penalty, that is, a penalty which is a proportion of the outstanding tax rather than a flat amount.
Section 13 amends Part 12 of the Act to introduce three additional categories that may qualify for a deferral of local property tax. These include the personal representatives of a deceased liable person and an individual who enters into an insolvency arrangement - I have already outlined the provisions in this section. Section 14 deletes sections 140 and 143 from the Act. Section 140 is not a substantive provision and merely contains a definition of "authorised person" that is used in section 143. Section 143 provides for the inspection of a residential property for the purpose of establishing the market value of the property by a person who is suitably qualified to do so and authorised to do so by the Revenue Commissioners. This section was introduced as a Committee Stage amendment in the DÃ¡il. Following from concerns expressed by various Deputies and Senators during the passage of the Act through the Houses last December, officials of the Department and Revenue have, in conjunction with the Office of the Attorney General, reviewed section 143 of that Act and the Revenue Commissioners' power to inspect an individual's assets. In light of advice received from that office, the Minister decided that section 143 should be repealed. In conjunction with this, he has provided for a new general provision in section 98 of the Finance Bill 2013 that applies to the various taxes and duties under the care and management of the Revenue Commissioners in the valuation of an individual's assets, including property. The effect of the amendment being made by section 98 will be to require a person who has been authorised by the Revenue Commissioners to value a particular asset to obtain a warrant from a judge of the District Court where the occupier of a private residence does not consent to the inspection of the property or of any assets in the property. This general provision will also apply to local property tax and to the inspection of residential properties.
It is anticipated that the need for the Revenue Commissioners to seek to inspect a residential property without the consent of the occupier should only arise on very rare occasions. If the need for an inspection does arise, it is not anticipated that the occupier's consent will be withheld. As a practical matter, it would be difficult to resolve a difference of opinion between a taxpayer and the Revenue Commissioners about the value of a property without the Revenue Commissioners procuring a professional valuation of the property and this would necessarily involve an inspection.
Section 15 amends section 1094(1) of the Taxes Consolidation Act 1997 to ensure that outstanding local property tax liabilities are taken into account when tax clearance certificates are being sought in respect of the issue of certain licences, for example, licences for the sale of alcohol. Section 1095, containing the general tax clearance certificate provisions, already applies to outstanding local property tax liabilities. Section 16 makes minor technical amendments to several parts of the principal Act. Section 17 contains the Short Title of this Bill, the Finance (Local Property Tax) (Amendment) Act 2013.
As I stated earlier, this Bill is being introduced to give effect to previous commitments made by the Government made on the new local property tax. Senators will be aware of the upcoming May liability date and filing deadlines. In advance of these dates, and commencing on 11 March, the Revenue Commissioners plan to do a bulk mail issue of local property tax guides and return forms to all homeowners to assist them in their preparations for the new tax. The passing of the legislation at this time will provide certainty to the Revenue Commissioners. It will give homeowners time to consider the guide, assess their liabilities and make their returns on time, as well as assist in the smooth implementation of the tax. I commend the Bill to the House.
I welcome the Minister of State. We have serious concerns about the format in which the property tax legislation is being introduced. It is not a tax on income nor does it take account of ability to pay.
Bringing in a property tax that does not correlate with people's income will put more people with mortgage difficulties into deeper and deeper trouble. That has been our essential point all along. In order to bring in a property tax, one needs first of all to look at the mortgage crisis where 30% of mortgages are either in arrears or have been restructured by the banks. This shows the depth of the crisis but what it does not show is how much worse it will get because we have the lowest central bank rate in Europe at the moment with the ECB rate below 1%. A total of 180,000 people are on tracker mortgages. These were introduced by the banks between 2004 and 2007, which was when most of them were taken out and the highest prices were paid. Those on tracker mortgages have the worst negative equity and the largest loans. They are lucky to be on tracker mortgages because the banks have free rein and were not controlled by this or the previous Government when it came to raising interest rates on those who were not on tracker mortgages. When the ECB rate goes up over the next three, four, five or six years, all those on tracker mortgages will become part of the group in arrears and difficulty and will need restructuring. We are taking money from people through the universal social charge and cutting public sector pay, levying more tax and implementing more cuts. When their mortgage bill comes in as the ECB bank rate goes up, we will have a larger mortgage problem. I said before in this House that the guy who told us we needed to solve our mortgage problem was none other than Bill Clinton. He said that at the Irish Global Economic Forum, the second anniversary of which is coming up in November this year. We have not really tackled that problem at all. We have brought in the legislation relating to debt and debtors yet we know this will only account for a few thousand people per annum. That does not take care of the hundreds of thousands of people who find themselves in mortgage difficulties.
I am also an auctioneer. Sending out estimate evaluations of properties will lead to widespread confusion. I am confused and perhaps the Minister of State could clarify this on Committee Stage. Will a scenario arise whereby if somebody honestly puts in a figure of Â¤180,000 and sells the house in five or ten years' time, somebody from Revenue can decide that the person undervalued the house in May 2013 by Â¤50,000 and, with penalties, now owes Revenue tens of thousands of euro? The reason I am asking for clarification is because I have read different accounts in newspapers as to what happens in those cases.
I have asked the farming bodies whether they received clarification from Revenue about what happens when it comes to farmhouses adjacent to farm buildings and apparently they have. As a valuer, I am well aware when one is adjacent to a farm building, one cannot sell a farmhouse without selling the farm buildings. We were told by Revenue that one values the farmhouse, an acre and buildings but I believe farm buildings are to be excluded. What that would mean is that any farmhouse adjoining slatted units or any of the commercial elements of the farm would be worth less than Â¤100,000 because nobody will buy a farmhouse unless he or she has control of the adjoining sheds. By virtue of the valuations method about which Revenue is talking, the Government is automatically ensuring that every farmer will pay under the figure of Â¤100,000. I would like clarification on that issue.
There are so many anomalies. The most significant issue raised on Committee Stage in the DÃ¡il was the ability to pay clause. I know there are deferrals but those thresholds are not particularly high. Deferral means that one is, to use that famous terminology, kicking the can down the road. We have seen debt forgiveness for the multimillionaires and billionaires. Here we have all these mortgage-holders who are struggling to pay their mortgages. We levy a property tax and keep cutting child benefit and the income of gardaÃ, which is of serious concern. I am sure colleagues opposite are aware of cases where gardaÃ are finding it difficult to pay their mortgages. If a garda is taken to court for inability to pay, he or she loses his or her job because a garda cannot be declared bankrupt and still retain his or her job.
We have not tackled the core issue. If the mortgage issue was tackled, the Government bringing in a property tax would be seen as part of what we should never have done, namely, getting rid of the property tax in 1977, and would be seen as part of normal Government income and expenditure. However, this is not a normal situation so bringing in a property tax now does not solve the problem in terms of Government revenue. It just adds to the problem by ensuring people spend less money in the economy. They are afraid their mortgages will go up and the tracker rates will go up. We will then ensure that the economy continues to spiral downwards.
I would like to get the Minister of State's view on when and if Revenue can tell people their property was undervalued on day 1. As a valuer, I would find it very difficult to put an accurate value on people's houses. There are three methods of valuation. One does it by comparison. There is very little moving so, therefore, how does one compare properties, especially in rural Ireland where properties can be uniquely different? One can use a residual method where one gets the site value and the cost of building the houses. We all know that one can buy a house for less than it would cost to build it.
I will conclude. One can also use the income method. We all know that rents have fallen in many areas and would not come near covering the mortgage or giving a return to any owner, given all the taxes and charges they have on board. The ultimate issue is that it is the worst possible time to be bringing in a property tax. Bill Clinton told us that we must solve our mortgage issue and we have not done that. Until we do, our economy will continue to contract. Bringing in a property tax now is the worst possible move. It will not solve any problems. It will just create more problems.
There is no good time to bring in a new tax at any stage anywhere because people do not like new taxes. Realistically, one must make a decision. Does one favour a property tax or not? When one compares a property tax or increased income taxes, there is no question of increasing income tax. Income tax increases are always a negative in respect of job creation. I held a financial forum in my home town of Gorey a few weeks' ago. There were 37 people at the meeting to whom we gave a simple choice between implementing a property tax or increasing income taxes. I must admit that I was very surprised by the outcome. Everybody favoured implementing a property tax over increasing income tax. It was a private ballot where everybody had the option of putting it on the record.
I was equally surprised when I read the amendments tabled by Fianna FÃ¡il. This is not the television programme "Dallas" and Deputy MicheÃ¡l Martin is not Bobby Ewing. He cannot step out of the shower and state we will ignore everything that happened in the past and pretend Fianna FÃ¡il had nothing to do with agreeing to the memorandum of understanding. The Fianna FÃ¡il-led Government of which he was a senior member agreed to the introduction of a property tax under that memorandum of understanding and that is exactly what we are implementing. In its opposition to the property tax - stating it is the wrong tax at the wrong time - Fianna FÃ¡il is being somewhat dishonest. As stated, there is probably no right time to impose a new tax on the public.
In the context of its capacity as part of the Northern Ireland Executive, Sinn FÃ©in has proved itself capable of implementing a property tax, a family home tax or whatever one wants to call it which is much more expensive than what we are discussing. I was very happy when the Minister agreed to fix the local property tax until 2016 because this means there will be clarity and no equivocation. For example, we will not be informed that the property tax will be doubled or trebled next year. The tax may or may not increase after the next general election. That will depend on who is in power at that point.
There is a need to highlight some facts. The best guesstimate is that there are 1.8 million homes in the State. We know that there are 750,000 mortgages on approximately 450,000 homes. If one subtracts one from the other and then subtracts the result from the guesstimate to which I refer, it is obvious that there are 1.4 million homes which are not the subject of mortgages. These are the facts. However, there are others which we should not ignore. I have stated on every occasion which has presented itself that there is a group of people who are in a particularly difficult position and to whom the property tax should not apply. I refer to those who purchased at the peak of the boom from 2002 to 2008. For whatever reason, these individuals' homes are in negative equity. They paid enormous stamp duty on their homes and the personal insolvency legislation is not going to apply to them. Senators may ask why this is the case. As the Minister of State is aware, the legislation to which I refer will apply to those who find themselves in the very worst of circumstances. We are informed that there are 45,000 such individuals. Not everyone is going to go down the route of personal insolvency. The people to whom I refer are those who will beg, borrow or scrape together the money to allow them to hold on to their properties and ensure they are not obliged to use the provisions of the Personal Insolvency Act which is in place for those who have no other options available to them. For some of these individuals, bankruptcy will be the only option. A majority of people will opt not to avail of the provisions of the Personal Insolvency Act. In such circumstances, it would be wrong to oblige those to whom I refer to pay property tax. I understand the Government does not want there to be many exemptions, particularly as this would lead to the system becoming diluted and the 1.8 million homes to which I refer becoming 1.4 million or 1.5 million.
What angers those who paid the household charge most is that another coterie of individuals have not paid it. As is the case with television licences, 80% to 85% of people pay, but the other 15% to 20% will not pay no matter what. Those who have paid are satisfied to pay their taxes, as is the case with the vast majority of citizens within the State. Those who do not pay because they do not deem it appropriate should be obliged to pay. There should, however, be some leeway for those who purchased their homes at the peak of the market, paid enormous stamp duty on them and now find themselves in negative equity, Those to whom I refer should be given a break. If they meet very strict criteria, they should be considered to have already paid property tax in the form of stamp duty. This could be done if there was a will to do it. Such an action would show that apart from putting in place the personal insolvency route, the Government was listening and trying to do something for the people in question. These individuals would not save a fortune if they were not obliged to pay property tax. It is not a question of money; rather, it is one of principle. If my suggestion was taken on board, it would demonstrate that the Government was prepared to do something for those who were caught out at the peak of the boom. I ask the Minister of State to communicate my very personal and strongly held view on this matter to the Minister for Finance. Many of my friends find themselves in the dilemma to which I refer and will not opt to take the personal insolvency route. We should try to do something for them.
I welcome the Minister of State. Senator Mark Daly has stated this is the wrong time to introduce the local property tax. I suppose it would have been better to introduce it when tax revenues were buoyant and income tax could have been replaced with a property tax. In other words, we could have redistributed the burden of taxation rather than introducing an additional burden. As the saying goes, however, we are where we are. The previous Fianna FÃ¡il Government did not take the opportunity in this regard when it presented itself and people must remember this.
I do not wish to get into a debate on the issues relating to the principal legislation, particularly as they were discussed in 2012. The property tax will broaden the tax base and is necessary. More importantly - this is an issue with which we have not really engaged - it will promote local accountability and improve local democracy.
Some of the changes contained in the Bill are minor in nature, whereas others are less so. I am happy that the Minister for Finance saw fit to listen to what had been said in the debates on the principal legislation in this and the Lower House and has brought forward amendments. I hope other changes will be brought forward and that these will reflect the experience gained in introducing this new tax. The previous tax was not a property tax, per se; rather, it was a form of rates. Such rates were deeply unpopular because they were regarded as being extremely unfair and I would not like us to repeat the mistake made in this regard. This is a new local tax which, it is hoped, has been designed to improve local democratic participation and will be re-evaluated in that context.
I welcome the changes which place the properties owned by local authorities and voluntary housing associations in the lowest valuation band. I accept that these valuations will only last until 2016, but it is an important recognition of the role of social housing. They provide for a very important distinction between social housing and the remainder of the housing stock. Many Senators come from local authority backgrounds and are aware that local authorities provide housing for those who cannot reasonably provide it from their own resources. While tenants whose circumstances change have the opportunity to avail of tenant purchase options, the reality is that they pay, according to their means, through the differential rent system. In theory, therefore, they are paying according to their means. This is the difficulty when one introduces a tax which takes no account of individual circumstances. In valuing social housing, there is a need to take into account the fact - this has been proved to be the case - that tenants in such housing generally are of very low means and do not have many resources at their disposal. Many local authorities will not be in a position to place an additional charge on tenants.
Valuing social housing is difficult.
Tenants have security of tenure and maintenance costs are high. There are successive tenancy rights, inheritance rights and so forth. There is very good reason to believe that one cannot value social housing as one would value other housing on the open market. It is very difficult to give an open market valuation. I would argue that some social housing has no value at all, when one takes into account the costs that attach to local authorities. I also welcome the exemptions given to properties used by charities for recreational purposes as this is an important recognition of social function.
I wish to give particular welcome to the exemption from the tax for houses damaged by pyrite. However, I am concerned that it should be made as easy as possible for people living in these damaged properties to claim that exemption. I suspect some of the houses damaged by pyrite could not be given away. This does not take into account the trauma suffered by people living in these homes. I am concerned that the legislation provides for the furnishing of a relevant certificate which will be provided for in regulation by the Minister. I urge the Minister, when making this regulation, to bear in mind the difficulty already suffered by residents and that the cost of obtaining such a certificate should not be such as to make it more costly than the relief itself. In my view, the relief should go beyond three years.
I refer to the other new categories of deferrals. It is important to bear in mind that these are deferrals, not forgiveness. According to Stubbs Gazette, it is estimated that 25,000 households will avail of the personal insolvency legislation. There are many reasons to believe that this number could be higher. I also recognise the attempt to try to deal with people who have suffered particular financial hardship as a result of the economic circumstances and that it will be open to the Revenue Commissioners to decide whether such people are given deferrals. I agree with Senator D'Arcy with regard to people who bought at the height of the Celtic tiger period. Stamp duty was a form of property tax and it must be recognised as such.
One of the difficulties with this legislation is that it does not know whether it is fish or fowl. It does not know whether it is a property tax or a local government tax. It needs to be clarified how much of the "local" property tax will be spent locally. If this tax is to be accepted by the ordinary man in the street, there needs to be absolute clarity as to where this tax is spent. I know that members of local authorities, in particular, members of the larger local authorities, are concerned. Their concern is that the local property tax will be used as an excuse to remove central government funding in a very significant number of areas. That concern needs to be addressed. If this tax is to gain acceptance there needs to be very sincere transparency and openness and very real clarity. I would not favour more than 15% of local property tax being transferred outside of a local government area. I accept there needs to be some transfer to those local authorities who will have a difficulty in raising taxation.
I wish to refer to a number of specific issues. Areas of land in excess of one acre are exempted from valuation. I understand that mirrors the Succession Act and other pieces of legislation. However, in my opinion, adjoining land that is not used for business purposes such as farming, is contributing to the residential amenity and should be taxed as such. This is not a frivolous point. There are properties all over the country that have from two acres and up to ten acres of land adjoining them. Properties on the hill of Howth and on Killiney hill have lands in excess of one acre. These should be valued for residential amenity. It is unfair to people, who literally have a handkerchief space in their back garden, that this is not the case.
I made the point about stamp duty. Another important point relates to service charges for apartments. At the moment, these charges range between Â¤1,500 and Â¤2,000. This charge is to allow for privately provided services within apartment blocks which are not being provided by the local authorities. Some recognition of that fact needs to be made. I do not know nor can I propose how that would be done but it should be done. It is certainly an incredible burden on people who live in multi-unit dwellings and it needs to be taken into consideration.
Before I call the next speaker I wish to welcome a former colleague, Deputy James Bannon, and his colleagues from Longford Town Council, Councillors Paul Connell, Tony Flaherty and the town clerk. I wish them well in their deliberations on behalf of the people of Longford Town.
Last December I tabled an amendment to this Bill at a time when the House was debating the Social Welfare Bill. At that time I was particularly downhearted about the role of the Seanad Members as legislators. I was all the more encouraged when the Minister for Finance, Deputy Noonan, said that he would take the amendment and look to bring it back within the Finance Bill later in the year. It is not every day that I have an opportunity to thank the Minister for Finance, Deputy Noonan, and his officials, for bringing forward the amendment to exempt properties used by a charity for recreational activities. He cites in particular the guides and scouts. Youth work organisations have faced cumulative cuts of up to 30% already and they expect to face more cuts. Any relief, even smaller relief, is more than welcome. I realise that organisations will need to apply for the exemption in order to avail of it. I wish to put on the record of the House that the Irish Girl Guides, the Catholic Guides of Ireland and Scouting Ireland, have asked me to thank the Minister for this exemption which will, I have no doubt, be used by other charitable and youth organisations throughout the country. I thank the Minister most warmly for granting this exemption.
However, I will take the opportunity to speak. I welcome the Minister of State to the House. No tax is easy and certainly, no new tax is easy. Unfortunately, due to the present economic environment and the challenging fiscal difficulties, there is little choice. Property tax is an international norm in that most countries in the world have a very well-established property tax. There are a number of very welcome elements to this particular tax. It is set in stone for the next number of years. This will bring certainty to the market for those purchasing properties. Following on from the local elections in 2014, local authority members will have a certain scope as to the setting of their local rate. I believe that future generations of public representatives will see this element of the tax being increased and local autonomy with it. I believe that political reform and reform of local government funding will go hand in hand. There has been significant political reform with a completely revised localised political agenda and there will be a referendum on the future of this House later this year. Naturally, that has to go with providing people with more autonomy in the raising of funds. The 15% element within the property tax is welcome. I would like to see that provision developed in the future.
This is a very important incremental step in our financial recovery. I commend the Minister for Finance and the Minister for the Environment, Community and Local Government for preparing people for what will be a long-term tax. In my view, this tax will not be abolished. It should never have been abolished in the 1970s in the first place. We need a properly structured myriad of taxes. This tax emulates best international practice. We may not like it but it is a necessary tax.
I welcome the Minister of State to the House but I do so as a formality because I cannot welcome what he has said here. This is a loathsome, vicious and immoral tax. I oppose the entire idea and I note that even the Minister himself acknowledges in his contribution that this was imposed upon us by foreigners.
There are a number of extremely regrettable aspects to this tax and I will try to list some of them. It has just been said that this is to be seen as a kind of local tax but I do not believe that for one minute. Let us put this clearly. We are now paying for our bin collection, which used to be a function of the local authority. We will be paying for our water, which used to be free, and we are paying substantially increased rates of motor tax, which pays for the roads, so there is not an awful lot left. We are paying for more of the services that were originally paid for out of rateable valuation and so on. Let us not parade this as some kind of equitable local tax because it is not and cannot be seen as such.
This was imposed on us by a gang of foreigners. We did not come up with this bright idea ourselves. I am not particularly interested in the ping-pong between Fine Gael and Fianna FÃ¡il as to which is responsible; I do not care a damn. It is wrong and immoral. This is taxing our homes. I tried to get the Government to introduce a section on home protection but it did not do so. Successive governments have failed to protect the homes of the people of Ireland. The Minister of State is aware of this, and may even be in that situation, because I do not think we are all that grossly overpaid after all these cuts and so on. I am sure he has constituents who simply cannot pay. What will happen then? Will the Government try to squeeze blood from a stone?
A nasty aspect of this is that we have brought in the Revenue Commissioners. One is not even allowed the opportunity to refuse to pay, to go to court and so on. The Revenue Commissioners will simply bloodsuck it out of one's income at source, if it can, or defray it from one's bank account. It will have powers of attachment and so on.
Prudent people who looked after and improved their houses will get another smack. Each week in this House I listen to reasons not to celebrate 1916. We have evictions, soup kitchens, rank-renting, informers - because we are being told that people who buy houses must inform on the people from whom they purchased them, and apparently some kind of spy in the sky, which I would like the Minister of State to clarify. Is Google Earth or a helicopter being used? It is absolutely indecent. It really is Big Brother, and I certainly object to it.
I am very surprised people would prefer this kind of tax to income tax because at least with income tax, one can evaluate the people who are capable of paying. I do not mind paying more income tax - in fact, I would welcome it. That is from where the State should be funded. It should be centrally funded by taxation.
How on earth can one gauge or assess the value of a property? The value of a property is notional; it does not exist until it is sold and it could be sold on different days for remarkably different values. At auction, for example, one could be lucky one day to have two people bidding against each other. If they have developed an irrational desire to possess a particular house, then the price could go through the roof but the unfortunate person who, in one sense, is the recipient of a windfall of good luck is penalised and treated as a criminal because he or she is told he or she undervalued the house. It is almost like the Nazis in that one has to pay for one's own execution. One has to value one's own house but there is no way of knowing how to do that. I can tell the Minister of State one way to do so, which would be quite accurate, but nobody has thought of it except on the little island of Cyprus. It is to take the valuation at the time the house is bought and add in a multiplier based on the number of years since that time and the variations in property values. One would then get a real price. Why should people be penalised for improving their houses or for building extensions?
I bought my house in a very dilapidated area and got involved in the whole preservation scheme and the start of the North Great George's Street Preservation Society. I spent the last 30 years or so restoring the house, one room per year. As a prudent person who was involved in the objectives of the State in restoring a historic building - through the negligence of the State the whole street had been allowed to disintegrate - apparently, I will now be whacked because it will be seen as a prime property. Some years ago, it was on television and I suddenly got tax demands for furniture and stuff. It is unbelievable what is going on in this country. It is a load of nonsense.
I have tabled an amendment to the effect that listed buildings of historic and architectural value and so on within areas of special conservation should get an exemption. There are exemptions, which are all nice - the girl guides' and the boy's scouts' dens and so on. They are all rubbish. There are pages of drivel about this in the explanatory memorandum, as if it mattered a damn. The only exemption worth anything is the pyrite one, which was first brought up in this House, but of course the leader of the Minister of State's party is determined to abolish it if he can fool the people. The Government is very coy about the rationale of the Bill, yet there is all this stuff about the exemptions, of which there are really very few.
Then there is the question of deferral. The Minister of State understands the suffering of the people but the idea of deferral is obnoxious in the extreme because people already have severe mental health problems because of the debts they are under. If one proposes to defer, it is only an overhang - in other words, they will never get out of it. Again, we seem to be punishing the prudent people.
I will vote against the Bill and I hope that what was said by Senator Conway - that it will never be revoked - is not true. Will Fianna FÃ¡il and Sinn FÃ©in, which might well form a coalition the next time, revoke this Bill? I would like to know the truth. They should not fart around and say it is not the right time and so on. Everybody will say it is never the right time to introduce a tax but it is certainly never the right time to introduce an unfair, unjust, immoral and partial tax which punishes people who have behaved well and produces a lot of silly-----
It is not on the agenda.
I have asked a few questions, one of which was about this spy in the sky, which I would like to know a little about. Also, will there be exemptions for listed buildings?
There was a very indecent exchange between the Taoiseach and Deputy Boyd Barrett yesterday in which the Taoiseach spoke about the Deputy's education and all kinds of personal things, and it really lowered the tone of the other House. What about the heritage houses and great houses such as Clonalis House - the home of the last O'Conor Don, a direct descendant of the last High King of Ireland - Glin Castle, Birr Castle and other such wonderful places, which are part of our tourism drive?
I welcome the Minister of State. The issue of property tax is an emotive one at such a difficult time in the economy, but there are many myths and rumours about. One that keeps being trotted out by certain people is that we pay stamp duty but no one else in Europe does.
In all of Europe people pay stamp duty or transaction tax on their properties. I have researched the matter and discovered that the sum can range from 10% to 13% when it comes to notary fees and transaction taxes. The public are being misled by comments that because stamp duty is paid in Ireland and not in any other county in Europe, there should be no property tax. Those in Europe do pay. Perhaps people should read more about the subject rather than discussing it over a pint somewhere and suggesting the claim as a good argument to put forward. We have not really examined what happens in Europe but I know those fees are paid in Europe and there is proof.
Like most people, I have a mortgage, but 40% of the population do not. Some of them may not be well off, but some are quite well off. If we exempt too many people, the tax will not be spread evenly. As many as 40% of people do not have a mortgage. Most of these could pay the property tax. We must spread the burden.
When I was a member of Donegal County Council I proposed a second home tax in 2001. I am not sure whether Senator Ã Domhnaill was there at the time. My proposal was unanimously agreed by all the county council members. At the time the then Government refused to adopt the measure because it was not feasible to collect a second home tax. Subsequently, it changed its mind and the property tax was introduced. If one travels to Donegal to stay in a second home in order to enjoy its beaches, roads and services, then one can well afford it. A person who buys a second home in Donegal should pay for the privilege. I do not want to pay my rates and tax in Donegal in order to provide services for people who will pay their property tax to Her Majesty's Government but refuse to do the same for the Government in the South. Donegal County Council was struggling to maintain services. The same people still live in their second homes. They can afford to travel first class to America and get bailed out by millionaires in order to improve their health, yet they refuse to pay Â¤100 to Donegal County Council.
I know people in Donegal who are not well off but still pay their property tax because they feel it is their duty to do so. They want to keep Donegal clean and have its roads maintained and its beaches cleaned. There was a bit of local resentment in Donegal because people felt that the British came over and the landlords were buying our property and developing and joining up farms because they had the money. Those people are not doing so now. There are still certain individuals who refuse to pay Â¤100 to maintain the lovely county of Donegal. There are many beautiful counties in Ireland, such as Cork and Mayo, but Donegal is probably the most beautiful. I do not think anybody will contradict my claim, especially Senator Ã Domhnaill.
One is either for or against a property tax; it does not matter if it is Â¤8 or Â¤800 per year. The stance adopted by the Sinn FÃ©in Party in Lifford is for no property tax, and Senator Reilly can state her own case. If one crosses the bridge in the town one enters Strabane, where the same party has recommended an increase in property tax. My friends and relations live in Strabane and they pay Â£100 per month while their cousins in Lifford pay Â¤100 per year, but they all state that there is no great difference in services. The people I know who live in Strabane have a bin collection service but they may only put a bin out once a month or every two months. Basically, they are pensioners, so the services they receive in Strabane are not much different from the services delivered in Lifford, where there is no property tax at the minute.
Deputy Pearse Doherty claimed on his local website that his party would abolish property tax, but I do not know if he was referring to Northern Ireland or Donegal. What if he crosses the bridge into Strabane? He will have to put an asterisk at the top of his website stating that his policy applies to UK viewers only and put another asterisk at the bottom stating what applies to people in Donegal. If his party wishes to abolish property tax then it should do the same in Northern Ireland. In the North there are no exemptions and every person who occupies a house must pay a property tax. The argument is that this is David Cameron's law, but it is not, and people should admit that. The tax is divided into a district tax and a regional tax, and the district tax is set by local councils. The Sinn FÃ©in Party is in the majority on these councils in most Nationalist parts of Northern Ireland, yet the property tax keeps being increased. If it is good enough that people are exempted in the South, such as people with disabilities, then it is good enough for Northern Ireland. Sinn FÃ©in should not mislead the people of Donegal by stating that it wants to abolish the property tax. I am sure that if Sinn FÃ©in got its hands on the property tax for Donegal and the rest of the country, it would be a different animal altogether. It would not be Â¤100 per year or Â¤90 per year.
I would like to make one more point. I do not like voting for a property tax if it leads to hardship for people. A reasonable majority of people know the difficulties that we are in and are quite prepared to pay, and 40% of properties in Donegal would not have to pay more than Â¤90. When Donegal people compare that sum with what their cousins in Strabane and Derry are paying, they will discover it is about one-tenth of the amount.
This legislation will inevitably cause great hardship to many people across the country. Let us face it. Fianna FÃ¡il opposes the legislation on the basis that it is simply the wrong time to impose a property tax on individuals who do not have the money to pay it. The tax will also cause the property market to stagnate and will affect the recovery of the economy. It is simply the wrong time to introduce a property tax.
I want to Minister of State to accept the fact that at least 12% of mortgage holders are in arrears of 90 days or more. Davy Stockbrokers has estimated that 50% of all mortgages are in negative equity. Middle-income families are being squeezed. They are the people who do not receive third level grants or medical cards. They are being totally squeezed at the moment and cannot take any more. Their disposable income is gone and they are having to sit down with the Money Advice and Budgeting Service to remortgage and refinance loans. Middle-income Ireland cannot take any more. The new vulnerable in our society are middle-income families, who simply cannot afford to take any more. They are the same people who will be asked to pay the property tax on top of the initial household tax.
The Government is targeting the same people who paid large amounts of stamp duty during the economic boom. The average stamp duty payment between 2000 and 2010 was Â¤20,000 per individual. The duty was paid together with local authority development levies, and in my county of Donegal there was a maximum levy of around Â¤7,000. People paid those sums because they wanted to live in rural Ireland, but now they are being penalised.
All of this comes down to politics. One can blame the last Government, one can blame Santa Claus, one can blame the man in the moon-----
In reality, the Fine Gael and Labour Party Government want to introduce the property tax. This is the same Government and the same political parties that made a promise prior to the general election. In the Fine Gael manifesto the words used were: "[An] annual, recurring residential property tax is unfair". In 1994, the then Deputy Enda Kenny said: "It is morally wrong, unjust and unfair to tax a person's home." Where do those words lie with the Taoiseach and the Fine Gael Party today? Clearly, there has been a departure from the party's earlier position that was evident back then.
Where is the realisation that families are struggling? Let us examine the recent report by the Irish League of Credit Unions which showed that half of all adults are struggling to pay their bills on time, 42% of consumers have had to borrow money to pay bills in the past 12 months, and only three in ten people are able to save any money at the end of the month. People simply do not have the money. The Government can squeeze as much as it wants but one cannot squeeze a lemon dry when there is no juice inside. It is very unfair to be targeting people in this manner.
The legislation also gives exhaustive, creative and alarming powers to the Revenue Commissioners.
The taxman will now be given exceptional powers to collect the money. Where individuals do not have the ability to pay, the Revenue Commissioners can take it from their salary or social welfare payment or go a step further and take it from their bank account. It is highly irregular and unsatisfactory that the Revenue Commissioners would be given sweeping powers to do that to people who cannot afford to pay bills.
On the valuation process, we know the reason this legislation was rushed through the DÃ¡il last night and is being rushed through the Seanad today. It is to allow the Revenue Commissioners write to 1.9 million residential property owners next Monday giving them an indicative valuation on their property. Who gives the Revenue Commissioners the right to tell Joe Bloggs that his property is worth X or Y?
-----telling them that their property is worth X, and then put them into a corner where they have to employ an auctioneer to carry out an evaluation, the average cost of which is Â¤150? Effectively, the Revenue is saying that it will cost people Â¤350 but they should get their own valuation which will cost them another Â¤150, which it may or may not accept. This process could end up costing people Â¤500 when it should only cost about Â¤100. It is a disgrace. I plead with the Minister, even at this late stage, to go back to the drawing board because the ordinary people who own property cannot afford it.
Fianna FÃ¡il put forward an alternative budget model in the last election which taxed people earning over Â¤100,000. We had it fully costed by the Department of Finance, the Minister of State's Department. It was an alternative budget which would have alleviated the hardship being inflicted by this legislation. I plead with Labour Party and Fine Gael Senators to vote against this Bill. They should stand up for the people of Donegal, and those across Ireland, and for their convictions, and they should not be afraid to go before the people in the next election if they do that.
FÃ¡ilte romhat a Aire arÃs go dtÃ an Seanad. As the Minister of State stated in his contribution, properties used for accommodation purposes by groups such as the Irish Girl Guides or Scouts Ireland will be exempted from the local property tax. I welcome that. The Bill also provides for exemption for residential properties used by a charitable body for recreational activities connected with its charitable purpose where this is not done on a commercial basis.
I applaud the Government for exempting voluntary organisations. I thank the Minister for the decision not to tax voluntary organisations such as the Dundalk sea and river rescue service, which the Minister has visited. We have many sea and river rescue organisations and committees along our coasts whose members work voluntarily. They give of their time, take leave of absence without pay, work at weekends and give up holidays. This Bill recognises that, and it is recognition of the contribution made by many voluntary organisations throughout the length and breadth of this country. I often wonder about the type of country we would have if we did not have committed voluntary organisations in every townland, town and village, and not only along our coasts.
I commend the Bill. We have to pay our way. We are one of the few countries in the world not paying property tax. I thank the Minister of State for his contribution.
I will not go into the legislation in detail given that we do not have enough time to debate it. We have tabled substantive amendments for Committee and Report Stages but we know we probably will not reach all of those with only 45 minutes allocated for the debate on the Remaining Stages.
Last December we saw the previous Bill rushed through the Oireachtas in a shameful way. There is a disregard for the democratic processes of the two Houses and the job we were mandated to do as legislators by our constituents, whether they be councillors or ordinary people who elect Members to the other Chamber. That is nothing short of a disgrace and demonstrates that the election promises made in the programme for Government in terms of political reform have been abandoned.
Given the limited time available there is not much point in dealing with the legislation in a substantive way. Instead, I will use this time to remind the Government parties, Fine Gael and the Labour Party, of the promises they made to the electorate in the general election of 2011, which is only two years ago. In the Fine Gael manifesto, the document it used to secure support from the voters, there was an explicit commitment not to introduce a property tax before 2014. Pages 59 and 60 of the manifesto decried what they called the Fianna FÃ¡il and Labour Party annual recurring residential property tax, and that was decried as unfair. It said it would not introduce such a tax. The Minister's colleagues in the Labour Party made a similar promise on page 16 of their manifesto, the document they used to convince voters to support them. They said the time was not right to introduce a site valuation tax and that any such tax could only be introduced after 2014, and must include exemptions to deal with those in negative equity and those who paid massive amounts of stamp duty.
The Fine Gael and Labour Party property tax election promises were, for people, central parts of the election campaigns, and people did vote on the basis of those proposals. However, on the second anniversary of the foundation of the Government, and in the past half hour, the Taoiseach and the TÃ¡naiste made their respective speeches about the two year anniversary, the Government is now voting through the second item of legislation introducing the annual recurring property tax legislation with no exemptions for those unable to pay or those in negative equity, no recognition of the massive stamp duty payments made by many homeowners, and no mechanisms to deal with the urban-rural variations in property prices.
As for Fianna FÃ¡il, as other Senators mentioned earlier, it is difficult to listen to its Members opposing this legislation.
It was included in the National Recovery Plan 2011-2014. Now that Fianna FÃ¡il sees the strength of the opposition to it, it pretends to oppose it but everyone knows, based on what they have seen in the past, that if Fianna FÃ¡il was in government it would be imposing this unfair tax on struggling homeowners.
Shame on them for punishing struggling homeowners. Sinn FÃ©in has said we will repeal this legislation and publish legislation to give effect to that. It is up to TDs to support that legislation in the other House when we introduce it.
Mention was made earlier of what is happening in the North in terms of rates, and Sinn FÃ©in was accused of hypocrisy in opposing the introduction of a property tax in the South and supporting rates in the North. We all know that the regional rate paid in the North goes towards education, health, housing, roads, water, sewerage and emergency services. Senator Norris made the point earlier that we can say that the money we raise from the property tax is going towards these services but it is not, whereas in the North it is paying for those services.
In 2011, the Government promised not to increase the tax burden on struggling families. We see clearly that promise is broken.
That is what we are here to demonstrate. We will publish our repeal Bill. There is no amending the fact that this is a fundamentally bad tax. We have shown that alternatives exist but the Government has turned its back on discussion and is only interested in further punishing struggling families who are at the pins of their collars.
While we had a debate before Christmas on the introduction of a property tax, this is another opportunity to put my thoughts on the record. I welcome the provisions of the Bill, particularly in respect of the number of exemptions included. It is very appropriate to exempt those houses affected by pyrite. I feel extremely sorry for those people whose situation is no fault of their own. It is very appropriate that a provision be made to exempt them as provided for in the legislation.
Senator Ã Domhnaill said he agreed with a property tax but that this was the wrong time to introduce it. The arrangement to introduce the tax was made with the troika by the previous Government. When does he propose it should be introduced? The troika is making plans to leave. Perhaps the Senator has not noticed that the news is good and time is running out.
It is important to introduce a property tax. We must put our taxation system on a more sustainable footing. The ravages of the 2000s were caused in part by the overdependency of the Exchequer on the market value of property and income from stamp duty and VAT payments on houses. We now find ourselves with a deficit we are making progress to close but which continues to cause an enormous burden on many fronts.
I would like to see more transparency in the amount of tax to be collected. There will be many questions from individual home owners. I represent a city constituency and the case has been made by many speakers for Dublin. I recognise that as a city, Cork has services which one would not have elsewhere but many of them are paid for by taxpayers, the bulk of whom are city dwellers. We are told that this is a local property tax, the proceeds of which will be spent locally. It will be based on market value. More tax will be collected in areas where properties have a higher market value which means citizens will expect more services to be provided locally. We need transparency to ensure that happens. I agree that a certain proportion should be moved across the country to support local authorities which are not able to collect enough tax to match their needs. The fact that the bulk of the tax will be collected in areas with high property values means individuals paying it will want to see how much money is being returned to their individual authority and how much is being spent locally. Elderly people who find themselves in a house whose value has increased because of services which have been provided in the area will never actually realise that value. They will have to pay a property tax based on that market value.
I support the implementation of a property tax which gets away from the focus on income. We need to reduce the burden on income tax and I commend the Government for refraining from increases in income tax. We must expand the tax base to ensure that, going forward, we have a more sustainable position.
The Minister of State is welcome to the House. Nobody welcomes any tax. This is one we debated some time back and we are not here to debate it again. We are here to debate the exemptions. I will make a few suggestions.
Should we consider applying some discount where there are fewer than two residents in a property? The exemption could be based on census figures. In the United Kingdom, a discount of 25% is available when there are fewer than two residents in a building. It would be interesting to consider that in the context of the Bill. More occupants usually means it is easier to pay. An amendment would therefore be appropriate. I am interested in a number of exemptions and whether they should be stated explicitly in the Bill. If a bank repossesses a property, is it liable to pay the property tax? It is just a question. Are diplomats and people in prison liable to pay the property tax? One might ask why I have raised such specific examples. In some EU member states, exemptions in these circumstances are clearly provided for in legislation. Should we amend our legislation to clarify the position here?
I found no mention in the Bill as initially drafted or as currently presented of occupiers aged under 18 years. Perhaps we should consider an exemption where a house is occupied by people who are all under the age of 18. I wonder also if we should consider amendments to cut out those elements of confusion for the citizen or consumer. Given the valuations of houses, will the Minister consider an amendment so that some universal benefits could be withdrawn from those who paid property tax on a house valued over Â¤1 million? Given the problems of means testing, this might be a way to introduce a more equitable system of social welfare. I wonder if we could introduce an amendment to that effect.
While we need to balance the books and I support the legislation, we must pay heed to the wider situation, particularly the mortgage crisis, which a number of speakers have mentioned. Anecdotally, I hear that people have over the last few months stopped spending. I have heard this from some business people, one of whom runs a garage and says there has been quite a drop in custom. People are thought to have ceased to spend in anticipation of the new property tax. I hope the Government will take on board the message that we are at about saturation point on the Laffer curve. The Laffer curve demonstrates that at higher rates of tax, less income is taken in by the Exchequer. At lower rates, more income is taken in. If there are green shoots of recovery, the Government must not go on increasing taxes. James Mackintosh of the Financial Times wrote "Ireland has met every one of the 190 requirements of the Troika of the IMF, ECB and European Commission overseeing its rescue programme". It is amazing to consider what the reward has been for the Irish citizen for the many sacrifices we have undertaken. I hope the Government has some pleasant surprises for citizens in the next budget.
I have tried to concentrate solely on the exemptions and to avoid discussing the property tax, which we have spoken about in the past. Today is the day to discuss the exemptions, some of which we must welcome. I have made a number of suggestions but we will wait to see if they form the basis of amendments.
I have been listening to the debate with interest as it has unfolded and have a point or two to make. As I was not present during the Order of Business, I wish first to acknowledge Senator Thomas Byrne's intention to run in the by-election. While we do not want to wish him success, we do wish him well.
That was the good thing but now I will start to criticise him. The Sinn FÃ©in position on the property tax is completely dishonest and we need not talk about it. The Fianna FÃ¡il position is worse than dishonest; it is ludicrous. Fianna FÃ¡il was the proponent two years ago of the exact same policy to which it is now completely opposed. It has made the argument that the property tax should be linked to income.
If it was linked to income it would be called an income tax not a property tax. If it was linked to stamp duty should it not be called a transaction tax? The argument that people in rural Ireland pay substantial development charges represents a misunderstanding of a development charge. It is a contribution towards the capital cost of infrastructure. A property tax is a contribution towards maintenance and ongoing services. They are basic arguments and for anyone to use them in any other way would be dishonest and might demonstrate a lack of understanding of the tax system.
It is a good thing for our democracy that the Opposition would robustly criticise and oppose any measure obnoxious to them and obviously the introduction of a property tax fits into that category. I fear, however, that the Opposition is going further than opposing the introduction of legislation and moving into a position that is insidious and I daresay subversive. Some parties have a history of subversion but I am surprised to find Fianna FÃ¡il moving into that area. It is one thing to oppose the legislative process. That is fine. It is the job of the Opposition and it must do so robustly but to take it outside the Chamber and exhort people not to pay the property tax is moving to a position of denying the legitimacy of a democratically elected government to make decisions on taxation. I am not saying Fianna FÃ¡il is doing this but other parties are. That is subversive. It is an inability to recognise the legitimacy of the State which we in the Parliament represent. That is insidious and horribly dangerous.
Those who are on the streets telling people not to pay this property tax, bin the tax or whatever, should realise that street politics is not appropriate for parliamentarians. We are dealing here with the very legitimacy of the State. The Government is elected to implement decisions in good times and bad. This is the key issue. Nobody wants to pay more tax, as Senator Quinn said. I do not want to pay more tax. It is a legitimate measure from a legitimately elected government. To move outside that is subversive, dangerous and wrong.
This debate is not about a local property tax per se. It is about the inbuilt inequities in that tax and its method of implementation. There was a build-up of misunderstanding at the time of the household tax which was a single charge for everyone. While it was an interim measure it has left a legacy which is the background to the local property tax. There is widespread fear about the valuation, apart from the fear of not being able to pay. There was some relief when people were told they would receive an estimated valuation which they could appeal but after some weeks it became clear that even if one accepted the estimated valuation one could be pursued. That was not good management. It recreated and accentuated the fear that existed. I suggest that when one gets an estimated valuation and responds in good faith and pays that should be the end of the matter. If one wishes to appeal so be it but it would be well worth reconsidering that even at this late stage because there is a lot of misunderstanding about it. One has to attend to the detail and the devil is in the detail.
It would help if there were no question of a sword hanging over one.
For people who want to do the valuation themselves the issue seems to be more location than valuation. As a result these anomalies will be widespread. People will say that if it is fair and equitable they should respond positively and correct the State's finances just as they did when the first household charge came in. People in one area will pay more because of the location although the house and overheads are the same as those in another area which has a lower valuation. To my way of thinking a house is a house. Those who have the most should pay the most. The exemptions in the Bill are too limited. Even the idea of certified insolvency where there is a mortgage involved is restrictive. We even heard this from the other side of the House. Many people who are insolvent will not want to go down that road. They will want to hold onto their property whatever else happens. That is not a major exemption. The one for charities is welcome and well-thought out, and was needed but it is still very limited. What about the people who cannot pay? All the statistics available show that there are many people who have no money left at the end of a week or a month after paying for the necessities. Deferral is like borrowing another mortgage that one cannot pay. We should add to the exemptions. Senator Quinn has put forward some ideas. They should be even broader than his ideas. We are still working against the protest mentality that has existed since the first household charge. People should pay what they have to pay. We would do a better job if it was very clear that it is not punitive to the point that it might be deducted at source in some cases from people who may be on a limited sum and unable to pay. That is a bit penal and sends out the wrong message. It does not make it easy to implement this tax.
Although we have advanced the legislation I would like the Minister of State to consider the question of valuation again. He might consider broadening the exemptions because there is scope to do that without undermining the basic work he has to do. Even if the overall valuation is not implemented in the first year, basing it on location is not necessarily the right way to go. I would not like to see people who are not in a position to pay, who are already suffering, frustrated and angry come under any extra pressure. I do not wish to be alarmist but there is a very high suicide rate in this country. I know of several cases, not to do with this tax, of suicides directly connected with financial issues. Some of them were very sad and very worrying. Let us make sure we do not create an environment that drives people over the cliff. I do not think the Minister or the Government want that. There is a time for a bipartisan approach and this is one occasion when we could work on the anomalies and inequity and fine tune this tax even though it will never be popular.
I have listened to the usual suspects talking about the local property tax the way they talked about the household charges and septic tanks. They are the very people who have inflicted extra charges on people. They persuaded people not to register their septic tanks and now those people must pay much more and cannot qualify for grants. They did the same with the household charge and those people must now pay much more as a result of being told by some parties not to pay.
We are facing the same problem with the local property charge. This Government was brought in to fix the national finances in a manner which supports work and job creation. People are talking about income taxes but further increases in income tax would have a very negative impact on job creation. The Government has said that on numerous occasions. The local property tax is six times more job friendly than taxes on labour and that comments comes not from the Government but from the ESRI. In designing the tax, the Government has ensured that it is fair and progressive with owners of the most valuable property paying the most.
The local property tax will be used to pay for vital public services including local enterprise and job supports; fire services, road maintenance which is mentioned on the Order of Business daily, libraries and recreational amenities. The tax also takes into account people's ability to pay it through a series of deferral arrangements, as was advocated by the Minister this morning. As a measure of fairness, the vast majority of people will pay something and the Revenue will ensure compliance and collection of the tax.
Fianna FÃ¡il signed up in 2010, in its negotiations with the IMF, about which it did not tell anybody, to the proposed introduction of a property tax with the objective of raising Â¤530 million by 2014. In its latest prebudget submission it also left in the flat Â¤100 household charge. That is the record of Fianna FÃ¡il in terms of this property tax being in place.
As regards Sinn FÃ©in, it opposes the introduction of this fair and progressive tax but it appears to have no problem whatsoever with there being a property tax in Northern Ireland where the owner of an average house pays approximately Â£1,000 in domestic rates annually. No deferrals are provided for people irrespective of whether they live in council houses or mansions in Northern Ireland.
This is a fair tax on assets and such a tax is commonplace throughout the developed world, of that there is no question. The reason Sinn FÃ©in along with other so-called socialists would oppose this tax, I suggest, is a tribute only to their political opportunism.
The Revenue Commissioners will be looking after this tax. The Minister has outlined the deferrals and the exemptions for households. I commend this Bill to the House.
Following on from Senator Cummins, in many ways we wish we were not here but at this stage of our consideration of the Bill we have added, under the agreement, Â¤10 billion to taxation, and public expenditure is still rising. We discussed that on the last occasion the Minister of State was in the House. We have become a high tax society. This is different from saying we will substitute the property tax for less tax on income. This tax will increase the overall tax burden and, as several Members said, the burden is really hurting people. We must address the issues addressed by Croke Park II and other issues such as those raised in the report on child benefit, the appendix to which shows that the Irish level of social provision is among the highest that one would find anywhere. It is difficult to address all of those when our employer - I am referring to people who are paid from the public purse - is broken. In trying to remedy that situation, extra schemes involving public expenditure cannot be pursued in the current situation.
This tax has been described as a stable source of income but it is not. If it had been applied in 2006, the revenue from it would be down by about 60%. Somebody in the Civil Service wrote that this is a new stable source of income but having regard to Irish property prices it is not. I guess the State is taking a gamble that house prices will rise.
Development levies should have been considered in this context. They were hidden in the price of houses in the boom and people paid ten of Â¤10,000 in levies. It is a bit like heads I win, tails you lose. Homeowners paid tax upfront in stamp duties on their properties, but the State has changed that and people do not pay stamp duty now but they pay tax on an annual basis.
The valuation process requires some thought. What about property values in high crime areas? I read the other day that 4,000 people have been arrested for a spate of burglaries. There was a massive spate of burglaries in areas about which locals would have known and they would have said that part of living in the area was the risk that one's house would be burgled twice a year. That problem is now under control but do the Revenue Commissioners know where high crime areas are?
As I said to the Minister, Deputy Noonan, when he was last in the House, if irresponsible bankers break out again and give a person a loan of a daft amount to buy the house next door, what happens in terms of the price of every other homeowner's house in that row of houses? There was such irresponsibility previously. Would it have been possible for anybody to live near the Burlington Hotel when the property industry went nuts and hundreds of millions of euros were paid for sites and there were residential properties nearby? What happens if once again we have irresponsible bankers on the loose going on lending sprees?
Another consideration is county council planning decisions. If a council approves planning for a toxic dump beside a house, can the owner include in his or her evaluation the possibility that the county council planning office would go AWOL and grant permission for such a facility? If something in a planning department goes wrong and an area is rezoned and people's houses are seriously devalued, can those people, having paid the tax for a number of years, get a refund? How would such a scenario be handled or would their properties still be valued at the highest limit?
There is constant pressure in the Irish media to talk up house prices. If such pressure succeeds and a ministerial colleague comes up with new tax incentives and despite all the evidence we go for a property boom again, that would not give any extra disposable income to people who see a house as being purely a place to live in. That is the problem with treating a house as an asset. It damaged this country hugely. Let us just have houses as places to live in and pay for the services that the Minister of State has described. There will be such pressures, as newspapers depended greatly on revenue from property advertisements. They are all the time saying we need a new incentive to start another property bubble but that would seriously damage people who will not have the extra income to pay the higher tax and all they want to do is to live in their house.
Income always declines for old people. At best, their income could decline by a half and, as the Minister will know, some pensions schemes are so small, that people's income could decline by up to 60%. Some consideration should be given as to how they can pay the tax.
In terms of trying to design a house tax system, perhaps the old poor law valuation system was not that bad after all in that it did take account of size. We have moved to a market value system which has many imperfections .
The Minister of State mentioned the legal independence of the Revenue Commissioners, a body that scares people. Are pensioners who genuinely have a decline in their income going to be put on the list of tax defaulters? The Minister of State referred to the inspection of the property and covered the issue of an honest opinion of the market value of a property. I think most people will be honest but it may not be an evaluation with which the Revenue would agree. We should assume that people will be honest in making their submissions.
Unlike the Fine Gael Party and Labour Party, I have not changed my view on the property tax and mine was an outspoken voice during the term of last Government that we should not have a property tax because of its unfairness.
I am glad that was reported in the media and I can remind people with my comments on the record.
I did not speak off the record on those issues.
The property tax is deeply unfair and unjust, particularly in County Meath. In towns like Dunboyne and Ratoath, which are in the top 13% of house prices nationwide according to the register of property prices for last year, no account is taken of mortgages, commuting to work or the extra costs of these families. It is deeply unfair. Another issue is the level of service people get from local authorities. Having paid development levies in a rural area, when people see the potholed roads and no prospect of it getting fixed when they pay the property tax, they are not inclined to want to pay the property tax. They want to comply with the law, as Fianna FÃ¡il does, but we can see the frustration people have when they see basic items left undone because of a lack of funding. In housing estates, people are expecting the grass will be cut or that residents associations will get more help from local authorities. That is not likely.
This is the wrong tax at the wrong time. No one, not even the IMF, told the Government to introduce this tax. The Government has renegotiated the IMF agreement on a number of occasions. One of the best examples of renegotiation is the reduction in capital spending expenditure with the IMF. The Government did not want to spend the money on capital expenditure, such as roads, and the Minister for Transport, Tourism and Sport boasted last year that Â¤400 million was cut from the road budget and no one noticed. That renegotiation was a Government choice, just like the property tax. No one told the Government to include people with very high mortgages or those on social welfare and no one told the Government to be so blatantly unfair.
One specific issue, which has an impact on a number of households in south Meath, is pyrite. I welcome the exemption for those houses with pyritic heave but people are asking a number of questions. The standard test for pyrite in a house costs between Â¤2,000 and Â¤3,000. Will that test be required for people to get an exemption? That will take the good out of the exemption. Another test is that someone comes in with a spirit level and checks the house or conducts a basic visual inspection. One can see whether houses have pyrite or have suffered from pyrite damage.
Another issue concerned housing estates where some houses have pyrite but others do not. All houses in such estates are unsaleable. This is a major issue in going to the Revenue Commissioners and saying the value of the house is zero. If I want to buy a house in certain estates in south County Meath, I cannot get a mortgage for any of the houses on the estates, regardless of pyrite damage. I hope the Minister of State is dealing with that point and hope to get the answer. I do not see the answer in the legislation. It will affect certain houses and not others, depending on the phase of building. However, all houses will be tarred with the same brush. I welcome some of the measures the Government has announced in respect of pyrite damage but I would like to see it being done quicker. I have been constructive in my support for the Government. There is much uncertainty for these people and they are asking me for answers. I am sure they will be asking people in Meath East over the coming weeks.
Fundamentally, this is a deeply unfair tax and it will hit people really hard. People do not realise the amount they will have to pay but they certainly realise the lack of services. We are often blamed for abolishing household rates in the 1970s but at the time they were very high and were a huge burden on families. Sinn FÃ©in is running a no property tax campaign in Lifford but in Strabane, which is essentially the same town, they have increased the local property tax by the highest rate in the North of Ireland. These are questions Sinn FÃ©in must answer in respect of property tax. I have always been opposed to property tax because I see its impact in County Meath, particularly in the commuter belt.
The Bill should be opposed and it is not true to say we have had a full debate on it. One of my colleagues said that this was the day for amendments and that we had a day for the property tax. We have had guillotined debates rushed through before Christmas and the Bill is now being rushed through before a by-election. This is deeply unfair to the people because they are not getting the full time to debate the issues. It is being handed down from on high while everyone is doing their work preparing for it, although the legislation has not yet been passed.
I am quite amazed at some of the comments I heard this morning in the Chamber. It was quite extraordinary to hear Senator John Gilroy, a Labour Party Senator, saying street politics is not appropriate for parliamentarians.
Is the legacy of Larkin and Connolly forever to be banished from the Labour Party? Street politics is very important for anyone who wants to be part of a campaign to defeat what they see as an unjust and unfair charge.
I did not interrupt anyone. I sat here and listened to all other Senators but other Members like to interrupt when Sinn FÃ©in Members take to their feet because they do not like what we have to say. I ask that other Senators in the Chamber give me some respect and allow me to make the points I am allowed to make. I have four minutes to make my contribution.
I am amazed Senator Thomas Byrne can walk into the Chamber with a brass neck and say he was against the property tax when his party signed the country up to a property tax with the troika under the national recovery plan, the infamous four-year plan. This is the same Senator from the same party that introduced the universal social charge and four tough, gruelling austerity budgets that had a deep impact on many working families. The same party threw away the sovereignty of the State and brought about massive unemployment, with hundreds of thousands of young people scattered across the globe, in America and in Australia. Hundreds of thousands of people are in negative equity and people cannot put food on the table or heating oil in their tanks. People are really struggling. All of the evidence points to more people living in poverty today than two, four or six years ago. Senator Thomas Byrne and the Fianna FÃ¡il Party must take full responsibility for all of that because he was a cheerleader for all of those policies and those in government who were putting the policies in place.
Labour Party and Fine Gael Senators must also take responsibility for the fact that poverty and levels of deprivation have increased. Senator Maurice Cummins talked about dishonesty. I challenge him to a public debate in Waterford on the issue at a time of his choosing. If he wants to throw mud and engage in a debate on the issue of the property tax, I challenge him to a proper debate. Let us remind ourselves of what Fine Gael said in the election manifesto. They were elected on the basis of what they put to the people of the country in their manifesto. I will read directly from it, on page 59 under the local government funding heading: ?Fianna FÃ¡il?s proposal, now endorsed by the Labour Party, to introduce by 2014 an annual, recurring residential property tax on the family home is unfair.? I agree it is unfair. Before the election, Fine Gael felt it was unfair and now the party seems to think it is fair.
The Leader of the Seanad said it is a tax on assets. It is not a tax on assets, it is a tax on the family home. Many assets are not being taxed. When Deputy Enda Kenny was asked about a property tax as the Leader of the Opposition in the DÃ¡il, the record of the DÃ¡il shows he said:
It is morally unjust and unfair to tax a person's home, and by so doing grind him into the ground. Indeed in cases it could probably be unconstitutional. [...] It reminds me of a vampire tax in that it drives a stake through the heart of home ownership, through enthusiasm and initiative, and sucks the life blood of people who want to own their own home and better their position.I agree with the Taoiseach that it is a vampire tax that will suck the lifeblood out of communities. It will suck the lifeblood out of families who are really struggling. The Minister of State is sitting there but does not understand what it is like for most families. He does not understand how difficult it is for people to make tough decisions about whether to pay the electricity bill, which many more people are finding it difficult to do, to put oil in the heating tank, to pay the gas bill, get groceries to put food on the table or send their children to primary and secondary school. The Minister of State is sitting there with an empty expression on his face because he lives in a bubble with his inflated salary. He has no idea whatsoever what it is like for those families.
The Minister asks us to support a grossly unfair, unjust and regressive tax which is not based on ability to pay. The family home does not raise revenue or generate income. The Government can do this through other taxes. The Minister has had any amount of options in the past two budgets to raise taxes on the wealthy and higher earners, but he has failed to do so. Instead, the Government is putting in place crippling, unfair and unjust taxes which are supported by Fianna FÃ¡il.
Perhaps my friend and colleague Senator David Cullinane did not hear, but Deputy Michael McGrath made it quite clear 18 months ago when it was first mooted that Fianna FÃ¡il was opposed to introducing a property tax.
Wait one minute; let us get this straight. The Senator cannot go around with the canard that somehow Fianna FÃ¡il is supporting the property tax. We are not supporting it at this time. Our finance spokesperson, Deputy Michael McGrath, has made it quite clear that we will not support this tax. He has also stated publicly that he believes it was wrong for the then Fianna FÃ¡il Administration to agree to the troika request in 2010. The party leader, Deputy MicheÃ¡l Martin, is on record as saying that, at the time when the then Government made that commitment, the economic situation was vastly different from what it is now. The Government has constantly perpetuated the view that matters are bad. How many times have we heard Ministers say the country is bust? Matters did change. When Fianna FÃ¡il is accused of being in favour of this tax on one occasion and not being in favour of it now, it must be remembered the Government has a monopoly of changing its mind. On how many of its promises has it changed its mind in the past two years, apart from some achievements which the Minister will be happy to illustrate to the House? It is perfectly feasible for a political party to have an evolving policy and change it depending on circumstances.
-----one will find the truth coming from the electorate. The 150,000 people who bought houses during the boom paid on average Â¤10,000 in tax on their properties. Now, they are expected to pay this new property tax. We are presented with a fait accompli in the Bill.
Today's newspapers report that the Revenue Commissioners will not send valuation letters to 65,000 taxpayers registered with Revenue Online Services. Being self-employed, I am one of those taxpayers and had been anticipating receiving a valuation letter in the post. Now, it looks like I will have to make contact with my accountant, my representative in dealing with Revenue, to establish how I will find out what the valuation of my property will be. Will putting this information online coincide with the letters being sent in the mail? Will the Minister consider informing the 65,000 people who may be waiting for a letter and find themselves penalised later for having forgotten to pay? This arrangement may sow some confusion, a point the Consumers Association has raised. If I had not seen this report in the media, I would not have known that this was the only way I would find out the valuation of my property. I accept it is an administrative issue and I am sure the Minister of State, in his usual efficient way, is on top of it. However, I am anxious to receive a reply on this arrangement.
The exemptions for those with pyrite affected homes are admirable. However, it is only a deferral, not an abolition and, as Senator Aideen Hayden pointed out, it will only be in place for three years. Again, considering the economic position, there may be a need to re-examine this issue.
I apologise to Senator David Cullinane who claimed I had a vacant look on my face. I defy anyone who has spent seven hours at an ECOFIN meeting at the Justus Lipsius building, like I did yesterday, not to have a vacant look on his or her face the next day. The Senator also claimed the Government lived in a bubble. It is a dangerous move in politics to presume that other colleagues do not know the circumstances we all face. No one is swinging from the chandeliers of this fine House singing, ?Yippee, a local property tax is being introduced.? No one on this side of the House is claiming this tax will be popular. It is inevitable when we are trying to repair the national finances that we have to broaden the tax base. The ESRI's statement that a property tax is six times less harmful on employment, enterprise and getting the domestic economy going than taxes on income is worth mentioning.
I agree with Senator Sean D. Barrett that we have reached saturation point on taxation, as I stated in a recent article in The Sunday Business Post. In 2008 in 12 months the taxation base collapsed from Â¤50 billion to Â¤35 billion. We have to fill the hole. This has nothing to do with the banks or the debt but with the fundamental problem that the taxation base, over a period of 15 years under the previous Government, was built on an unsustainable property bubble. One third of all tax revenue collected was stamp duty. In 2008 we fell off the financial cliff and moved from a tax take of Â¤50 billion to Â¤35 billion in 12 months. Our expenditure, however, did not change that radically and we have had to fill this gaping hole in the public finances. I agree that the property tax will widen the tax base, but it is not harmful to employment.
Even in the good times, we should have had the courage to consider introducing a property taxation system. Sinn FÃ©in claims this is not a progressive tax. This is, however, a wealth tax in another name. Extensive houses in extensive locations with a marketable value are a form of wealth. To suggest those at the top of the tree will not pay more is fundamentally wrong. This is a fair tax which replaces the unfair tax of the domestic charge.
We had a debate in the House on this issue before December. The Minister for Finance and his colleagues in the Department listened closely to what colleagues here had to say. In the amendments to the principal Act we have attempted to reflect some of the problem areas, although I am not saying there may not be changes in the future. There will be changes to the operation of the tax which is a fundamental change to tax law. There is a responsibility on all citizens to pay this tax. I take the point made by Senator John Gilroy that when laws are made in the Oireachtas, we all have a responsibility to enforce them.
It is unfair to attack the Revenue on this issue. The Revenue is simply doing a job that has been tasked of it by the Houses, assuming a majority of Members support the tax.
This is a change in taxation policy. It involves widening the taxation base. It is helping in a constructive way, as opposed to attacking employment, to bring tax and expenditure into better kilter. The evidence is available. In every other western European country there is some form of local property taxation based upon funding local services in local areas. It would be delusional on the part of some people to believe that we can ignore that now in the middle of this economic crisis. The Government stands over this measure. By no means are we deliriously happy with the prospect of introducing it but we are doing so because it is the right thing to do at the right time, to coin a phrase.
- Ivana Bacik
- Paul Bradford
- Terry Brennan
- Colm Burke
- Deirdre Clune
- Eamonn Coghlan
- Paul Coghlan
- Michael Comiskey
- Martin Conway
- Maurice Cummins
- Michael D'Arcy
- John Gilroy
- Jimmy Harte
- Aideen Hayden
- Fidelma Healy Eames
- Imelda Henry
- CaÃt Keane
- John Kelly
- Denis Landy
- Marie Maloney
- Mary Moran
- Tony Mulcahy
- Michael Mullins
- Marie Louise O'Donnell
- Susan O'Keeffe
- Pat O'Neill
- Feargal Quinn
- Tom Shehan
- Jillian van Turnhout