Lorraine Higgins (Labour)
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I thank the Minister of State for coming to the House to deal with the need for Minister for Finance to outline the steps he is taking to ensure that standardised criteria are applied to unfinished estates in the calculation of the amount due in property tax. A large number of people were deemed to be living in unfinished estates and thereby got an exemption from last year's household charge. These same people are now baffled as to why they are not included in the local property tax exemption list. Many of them have a good case for feeling this way as in many cases the developer did not fully comply with the terms of the planning permission. These people were bona fide purchasers of houses in the boom times and contributed handsomely to the Exchequer at that time. They have now been let down and are living in estates which might be substantially complete but have residual problems.

People living in an estate in Craughwell, County Galway, made plans to move out because a sewage treatment plant had stopped working and there were other residual problems relating to the builders failure to build the estate. Among a plethora of planning permission breaches by the developer, the final coat of tar was not applied and there was no proper demarcation of common areas. This estate was developed in the early years of the boom. I am baffled as to why the bond was not drawn down on time in order to ensure these works were completed. The properties could have been taken in charge by the local authority.

The Minister for Finance should outline the criteria being applied to unfinished estates in the calculation of the property tax. Are the Department of Finance and the Revenue Commissioners taking into consideration the underlying problems in an estate and not merely looking at outdated and obsolete valuations of properties? Are they considering issues such as those affecting the estate I mentioned in Craughwell? I hope they would apply a subjective valuation as a means of providing a just, fair and equitable system of property tax application.

Alex White (Dublin South, Labour)
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I thank the Senator for raising the issue. Section 10(2) of the Finance (Local Property Tax) Act 2012, as amended, provides that a residential property shall be exempt from the local property tax, LPT, where it is situated in an unfinished housing estate. Section 10(1) of the Act defines an unfinished housing estate as a development of two or more buildings that is specified in a list prescribed under section 10(3) of the Act by the Minister for the Environment, Community and Local Government for the purposes of the Act. Section 10(4) of the Act prescribes a range of circumstances to which that Minister shall have regard for the purposes of that section.

The Minister for the Environment, Community and Local Government has recently prescribed and published this list, which is set out in the Schedule to the Finance (Local Property Tax) Regulations 2013 and was compiled by local authorities utilising the categorisation employed for the purposes of the national housing survey 2012. The survey was carried out over the course of summer 2012 by the Department of the Environment, Community and Local Government in conjunction with local authorities and the housing agency. The categorisation methodology for the survey was different from that used in 2011 and which provided the basis for the waiver from the household charge. That earlier categorisation related largely to the level of on-site activity at the time the 2011 survey was carried out and had less to do with the physical character of a development. The 2012 survey was based purely and objectively on the state of completion of a development. Only developments that were deemed by local authorities to be in a "seriously problematic condition", regardless of whether a developer was on or off site, were included.

For the purposes of preparing the final list of developments to which the exemption from the LPT would apply, local authorities were asked by the Department of the Environment, Community and Local Government to confirm or update the then existing list as appropriate. The decision as to whether an estate is on the list of unfinished estates is in the ambit of local authorities and the Department of the Environment, Community and Local Government, and not in the ambit of the Department of Finance or the Revenue Commissioners.

I understand the Senator is concerned about the criteria to be applied in the calculation of LPT for unfinished estates that are not on the list of unfinished estates published by the Minister for the Environment, Community and Local Government, that is, those which do not qualify for an exemption from LPT. The Finance (Local Property Tax) Act 2012, as amended, provides how a residential property is to be valued for LPT purposes.

LPT is a self-assessed tax and it is a matter for the property owner, in the first instance, to calculate the tax due based on his or her assessment of the market value of the property. While properties in a particular housing estate may not have qualified for an exemption from LPT on the grounds that the estate in question is not regarded as incomplete to a substantial extent, owners of residential properties in such estates should take all aspects that they consider relevant into account in arriving at an honest value for their properties. Such factors would include the state of completion of roads, footpaths, lighting facilities, and water and sewerage facilities within the housing development concerned. The charge to LPT is based on the chargeable value of the residential property and this is defined in the 2012 Act as the price that the unencumbered fee simple of a residential property might be expected to fetch in a sale on the open market were that property to be sold on the valuation date of 1 May 2013 in a manner that would secure the best possible price for it.

Lorraine Higgins (Labour)
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I thank the Minister of State for his very detailed response. I am glad that he has clarified matters, particularly in respect of the market value of properties. I was contacted by a number of people to whom letters were furnished by Revenue in which it was indicated that their homes were valued at €140,000, whereas properties in the estates in which they live recently sold for €80,000. It is good that the position in this regard has now been clarified. That will be of some benefit to the people in the constituency in which I reside who raised this matter with me.