Seanad debates

Thursday, 23 November 2017

Commencement Matters

Defective Building Materials

10:30 am

Photo of Michelle MulherinMichelle Mulherin (Fine Gael)
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Fáilte. I welcome the Minister of State. My request is simple in many ways. I ask that the local property tax, LPT, exemption that exists in Leinster in respect of homes affected by pyrite be extended to cover homes in Mayo that are similarly affected and those in Donegal affected by problems with mica. An expert report on concrete blockwork in homes in Mayo and Donegal was published in June. This was commissioned by the Department of Housing, Planning and Local Government. This is the first official recognition that there is a serious problem with the deterioration of blockwork in houses in Mayo and Donegal such that it can cause major structural problems and even structural collapse of houses in due course. This is a serious problem. When the report was issued, realisation dawned on many people about the seriousness of the problem of having pyrite or mica in homes, the devastation that both can cause to properties and the cost involved in respect of remedial work.

The report estimates that approximately 345 private houses and 17 social houses in Mayo are affected. The estimate for Donegal is that between 1,200 and 4,000 properties are affected by mica. I think many more houses in Mayo are affected because even since the publication of the report, I have had people approached me about this matter. I also believe there is a significant problem with commercial properties. This problem is widespread and we need to get to the bottom of it. The property tax exemption that obtains in Leinster in respect of houses affected by pyrite is designed to give tax relief to people whose houses have pyrite-heave - an issue relating to pyrite in foundations. The problem with pyrite in Mayo and mica in Donegal relates to the blockwork. It is described differently. The redress board that deals with the owners of houses with pyrite problems in Leinster does not cover those affected in Mayo because a different type of pyrite issue occurs and different remedial works are required. It is only right that the exemption in question be extended to the affected home owners in Mayo and Donegal. These houses are probably worth nothing at the moment other than for the site value. Who would buy a site affected by pyrite or mica? People cannot do anything with their houses right now, which is a massive headache.

I ask that common sense prevail. There is official recognition of the problem on the part of the State by virtue of the report. Can we now have what, to me, should logically follow, namely, an exemption? Will provision be made for this in the Finance Bill, by means of regulation or in whatever way the Minister of State and Minister for Finance see fit? The issue of a redress scheme relates to the Minister for Housing, Planning and Local Government, Deputy Eoghan Murphy, and the Minister for Finance, Deputy Donohoe. Money is required in order that people might be given financial assistance to enable them to fix their houses. Such assistance has already been provided in Dublin. How are the negotiations between the Departments going? When might there be an answer to my request, which I have made on a couple of occasions, to have a redress scheme set up? It would be nice, going into Christmas, if we could give people some positive news because it is a depressing vista for those affected by this serious problem.

Photo of Michael D'ArcyMichael D'Arcy (Wexford, Fine Gael)
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I have heard the Senator discuss the issue relating to mica in homes in Mayo and Donegal on numerous occasions. I know she is determined to have something done about it. I acknowledge the stressful situation individuals can face when building defects manifest themselves after completion of construction and the significant impact this can have on those affected.

There is an LPT exemption which is intended to apply to those properties that have a significant level of pyrite damage. The qualifying criteria for this LPT exemption were modified by the Finance Act 2015. The changes made were significant. Where a property has been included in the pyrite remediation scheme by the Pyrite Resolution Board, PRB, without testing, or a property has been remedied by a guarantee company or by a builder or developer or where a party is compensated in lieu of remediation, without testing, Revenue will now accept confirmation of remediation or compensation from either the PRB or the relevant party for the purposes of LPT exemption without testing or National Standards Authority of Ireland, NSAI, certification.

The mica issue has been examined by the Department of Housing, Planning and Local Government. I am informed that an expert panel on concrete blocks was established by that Department in 2016 to investigate problems that have emerged in the concrete blockwork of some dwellings in counties Donegal and Mayo. I will not read the terms of reference because I am sure the Senator is aware of them. I understand that the report of the expert panel, which includes eight recommendations, was published in June. The Department of Housing, Planning and Local Government has already taken action to implement recommendations 1 and 2 as a matter of priority. On recommendation 1, the NSAI technical committee, established to scope and fast track the development of a standardised protocol, held its inaugural meeting on 11 September 2017 and has held several further meetings in recent weeks. The standardised protocol will inform the course of action regarding remedial works for all affected properties. In the context of recommendation 2, the Department of Housing, Planning and Local Government has been in contact with Engineers Ireland about the establishment of a register of competent engineers for home owners' and affected parties' reference. Engineers Ireland has provided assurance that it will collaborate with the Department and the NSAI on measures to establish such a register.

I understand that the Minister of State at the Department of Housing, Planning and Local Government, Deputy English, visited Donegal and Mayo during the summer and met with key stakeholders, including affected home owners, elected members and officials of the local authorities and other interested parties. In light of the information contained in the report, the Minister of State, Deputy English, is considering what further actions may be required to assist the parties directly involved in reaching a satisfactory resolution to the problems that have emerged in Donegal and Mayo. The legislation governing the administration of LPT provides for a limited number of exemptions from LPT. There is no specific exemption for properties affected by mica and there are no plans to do so at the moment.LPT operates on a self-assessment basis 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. When making an assessment, issues such as the presence of pyrite or mica would be one of the factors that a property owner should take into account in valuing their property. On that basis, where a property was affected with pyrite on the LPT valuation date of 1 May 2013, it can be reflected in the selected valuation band. This can be done retrospectively if the presence of pyrite was not taken into account in the 1 May 2013 valuation.

On the specific question the Senator put to me, the Finance Bill 2017 is at a very advanced stage. As the Senator is aware, Report Stage is due to be concluded today. I doubt anything can be done in this year's Finance Bill as we are coming to the end of the process of passing it. We expect Report Stage to be concluded today and I assume the Bill will come to the Seanad next week. It is a matter for Members of this House to present amendments or considerations as they see fit. I will discuss the matter with the Minister, Deputy Paschal Donohoe. I know he is aware of it. As the Senator knows, I am certainly not someone to ignore the impact this issue would have on people. I will discuss it with the Minister. I do not have knowledge of the interactions with the Department of Housing, Planning and Local Government but, again, I will speak with the Minister, Deputy Eoghan Murphy, and the Minister of State, Deputy Damien English, and I will try to get back to the Senator with an updated position.

Photo of Michelle MulherinMichelle Mulherin (Fine Gael)
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I thank the Minister of State. I know that he has answered as best he can. The reality is that I have been in contact with the Revenue Commissioners in respect of two distinct occurrences of pyrite, one in the foundation and another in the blockwork. I have been told that the exemption as described in the legislation does not cover blockwork. The reply the Minister of State has given to me does not seem to allude to that distinction. What am I to tell the home owners, based on the Minister of State's response? It is disappointing that it does not speak to the distinction and the problems in Mayo and Donegal. Will the Minister of State contact the home owners and revert to me? We need to give clarity to the public affected by Revenue policy on this issue. Revenue needs to establish what needs to be done. There is the Finance Bill, an amendment to it and regulations, so it is obviously a complex issue of legislative drafting. People need to know where they stand.

Photo of Michael D'ArcyMichael D'Arcy (Wexford, Fine Gael)
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I will contact Revenue and try to get clarification on the matter. I do not like ambiguity or positions being unclear. The note I have says one thing but the Senator is telling me something contrary to it. I will contact Revenue directly and I will have officials try to conclude the matter in order to determine the correct position.