Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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161. To ask the Minister for Finance his plans for a site value tax; the estimated revenue that might be raised by this measure; and if he will make a statement on the matter. [36597/18]

Paschal Donohoe (Dublin Central, Fine Gael)
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The 2012 report of the Inter-departmental Group on the Design of a Local Property Tax (the "Thornhill Group") comprehensively examined the basis of assessment for the Local Property Tax (LPT), including both the taxable value of the property option and a site value tax (SVT). The report favoured the use of market value of residential properties as the basis of assessment and this recommendation was accepted by the Government.

The Thornhill Group concluded that the arguments for SVT were outweighed by the likely difficulties in ensuring acceptance by taxpayers, i.e., arriving at values that were evidence based, understandable and acceptable to the public in addition to complexities and uncertainties in the valuation effort necessary to put an SVT in place. In contrast, the Group considered that under a market value approach applied to housing, the market value of a residential property would be related to the characteristics of the building itself, the site on which it was located and the characteristics and amenities of the neighbourhood. There would be a relationship between the market value of a house and benefits to the owners in terms of enjoyment of the amenity value of the properties.

At the request of the Minister for Finance, the operation of the LPT was reviewed in 2015 by Dr. Thornhill. A number of submissions to the review favoured changing the basis of determination of LPT liabilities to site value, floor area or variations thereof. Dr. Thornhill considered these but remained of the view that market value is the most appropriate and equitable basis on which to determine LPT liabilities.

Both Commissions on Taxation in 1985 and 2009 favoured property taxation based on market value citing inter alia significant difficulties in communicating to home-owners and land-holders the nature of the taxation charge that is involved and the benefits that would accrue from that change.

At my request the Department of Finance is currently finalising a review of the LPT in conjunction with the Departments of Public Expenditure and Reform, Housing Planning and Local Government and the Taoiseach and the Revenue Commissioners. The review is looking in particular at the impact on LPT liabilities of property price developments and includes a consultation process to enable all interested parties and individuals to submit their views on the future of the LPT.

I have no plans to introduce a Site Value Tax.