Vol. 439 No. 7
3 Mr. Cox asked the Minister for Finance the number of residential properties in the State that are estimated to be worth £75,000 and £100,000 or more; the number of households that are estimated to have a household income, whatever the number of sources, of £25,000 or more; and the number of households that are estimated to have a property valued at £75,000 and a household income of £25,000.
I am informed by the Revenue Commissioners that a precise breakdown of the housing stock by range of market values is not feasible without a comprehensive nationwide valuation survey. In the absence of such an exercise the estimation of the number of houses within various value ranges must draw on available data which is, in general, of a limited nature. The principal source of information available is the data from the ESRI survey of income distribution, poverty and usage of state services. This was a nationwide survey of more than 3,000 houses, undertaken in 1987. The results drawn from this survey have been updated to reflect movement in house prices since 1987. The resulting data is, of course, supplemented by experience of the operation of the residential property tax scheme.
The estimates in relation to house value requested by the Deputy are as follows: the estimated number of houses worth in excess of £75,000 is 60,000, and the estimated number of houses worth in excess of £100,000 is 18,000.
In relation to household income I am informed that statistics are not recorded in such a manner as would allow for a firm estimate of the number of households with income above £25,000.
While the number of houses worth in excess of £75,000 is estimated at 60,000 it is assumed that over 50 per cent of this number will qualify for income exemption. This assumption is founded upon the practical experience of the Revenue Commissioners in administering the tax and borne out by compliance mechanisms such as the tax clearance procedure. On this basis it is estimated that the number of households with a property value in excess of £75,000 and a household income of £25,000 or over is 28,000.
They are all in the south east.
The seat is gone there.
The Minister is obliged to make a good guess as to the impact this tax is likely to have and is not in a position to say with any certainly that what the critics of this extension of the tax have been saying is either accurate or over the top. I put it to him that there must be a fourchette or a range of possibilities. Given that he has to make an estimate, how much does he expect to raise by way of this tax and will he outline the range of possibilities?
The Deputy should not frighten the Minister by using the word fourchette; he sees it in his nightmares.
It has been estimated that between £9 million and £14 million will be raised. It would be wrong to use the word "compliance" when talking about this tax. There is an element of subjectivity about how people price their homes. On the basis of what has happened in the past 12 years, I would not like to bet all my income for the month of March on reaching that figure.
One of the tests of a good tax is certainty about its incidence and the amount it will raise. This tax fails that test and that should indicate to the Minister that alternative possibilities should be looked at.
The Deputy is correct. There is not as much certainly about this tax as one would wish, but this is not the only tax where this is the case. From the hype that was generated for a few weeks after the budget, one would think everybody was going to have to pay this tax. On the basis of updated statistics, and allowing for subjectivity in regard to returns, it is not an unreasonable shot, and the 10 per cent reduction for each child under 18 years of age and the marginal relief means a 50 per cent reduction. That has been the position every year since 1983 when Deputy Dukes introduced this tax.
Is the Minister getting as many letters about this as I am? Many people are very unhappy about it.
I notice that since the Deputy could not create any hype in Wexford he is running around north County Dublin trying to do so and wasting a great deal of money on hotel bills.
If the next question is not called and responded to promptly, it may not be dealt with.
In reply to Deputy Cox, I think the figure will prove about right, and that must allow for certain amendments I hope to make in the Finance Bill for hardship cases.
