Finance (Local Property Tax) Bill 2012: Committee Stage (Resumed) and Remaining Stages

Question again proposed: "That section 1 stand part of the Bill."

I will continue by stating my opposition to the proposals regarding the Revenue Commissioners and the fact that the Revenue Commissioners will have far-reaching powers when it comes to forcing people to pay the property tax. Many people fear the implications of the Fines (Amendment) Bill which is to come before the House. The Minister knows that many houses in our towns and villages that sold for €200,000 and €300,000 have recently been sold through NAMA for €40,000, €50,000 and €60,000. In some cases, it was like a lucky bag where one could buy 20 and get ten free. Where will we be when it comes to putting a value on those properties? If a person has a mortgage of €200,000 or €300,000 on his or her property but can point to a house down the street that has sold for €40,000 or €50,000, is it not fair, right and reasonable to say that this is the true asset value of the house and that, therefore, if this person must pay a tax, it should be set at that value? That is a very important point.

I am sure the Minister is aware that local authorities are preparing and passing budgets and having budget meetings. The town council in Listowel, a place the Minister knows very well, held its budget meeting last night where it had to make an allowance of €9,000 for half a year's property tax on properties it owns. The Minister knows that if Listowel Town Council must pay €9,000 next year, that money will come from another part of its budget where it was providing necessary services with that money. People will be hit on the double. We are being told it is to provide better local services but in that instance, the Minister is taking away local services. Kerry County Council held its budget meeting yesterday. It has made an allowance of €40,000 to pay the property tax. We were led to believe the local authorities would not have to pay the property tax. That €40,000 will not fall out of the sky. It must be taken from somewhere else so that money, be it for street cleaning, fire stations, repair of footpaths or street lighting, does not appear from nowhere. It comes from the budget to pay the property tax.

The whole thing is wrong. I again emphasise that I have nothing but the utmost respect for the Minister and his political experience but I remind him that the one thing said by the Government parties when they were campaigning in the general election was that previous Governments had lost their way. He should marry that with this scenario. On the day this Budget was being passed, the Minister with responsibility for introducing it did not see fit to be here in the House and was away in India. I will say no more about that. Young couples are burdened with this massive debt from which they will never free themselves unless there is a massive write-down. If these couples have a mortgage of €250,000 but their house is valued at €100,000, there should be a bailout for them in the same way as there was for the banks and their mortgages should be re-adjusted to the value of the house. If the value of the house is €100,000, their mortgage should be reduced to €100,000, they should pay a property tax on €100,000 and at least they could see some light for the rest of their lives besides an overpowering debt and burden upon them.

I know it is not falling on deaf ears with the Minister because of his experience. He would not be in politics for as long if he had not listened to people over the years. He cannot think that this is right. It is ill-devised and badly thought out and has been rammed through by a Minister who has lost touch with reality. To be in India when a budget was being presented with a property tax for the first time in many years did not make sense and did not send out the right message to young people who are suffering and living on the most minute budgets. They are failing to pay their electricity bills, are trying to scrape money together every week to do the shopping and make their small budgets go as far as possible and will see the mighty people on this side of the House impose a property tax on them. It is immoral and insane and people are very angry about it, particularly younger couples who are saddled with debt.

I thank all the Deputies who contributed. Once it settled down, there were some very interesting interventions and comments. I will not be able to reply to everything because if I do, I will take up the rest of the time that is available but I would like to deal with a few points that were reflected across the House.

Give us more time then.

Lift the guillotine.

The initial criticism is that we are guillotining the Bill and it is being put through without adequate debate. Very often, budgetary measures are put through on that basis. From time immemorial, the Financial Resolutions are taken on budget night for the text changes and they must be put through before midnight. In recent years, the social welfare Bill has been taken in a very short timeframe to implement another set of budgetary measures. On this occasion, we are implementing the property tax measures as well.

(Interruptions).

If Deputies do not want to hear me, I will sit down and they can ramble on like they did for the past hour and a half. If they want me to reply, I will reply so which is it?

(Interruptions).

Will Deputies allow the Minister to respond?

The Revenue Commissioners, who have been charged with collecting this tax, have informed me that if we legislate in the Finance Bill, it will be too late for them to make the arrangements they require to collect the tax so they have advised me that we should legislate before Christmas so they have certainty about the provisions of the Bill and can make the arrangements for the tax. That is the first point.

The second point is in reply to Deputy Donnelly who asked about amendments. I obviously cannot do it tonight but I am noting any interesting points made and we will come back and amend in the course of the Finance Bill. I am already considering amendments on the position of executors and whether they would be liable or not. I am considering the pyrite situation and have already made a commitment that owners of houses affected by pyrite will not have to pay the local property tax. The question there is the actual format of the amendment. I am also looking at the position of approved housing bodies because I received a number of representations. If people come up with good suggestions tonight, I will look at them again and we can adjust that in the Finance Bill and it kicks back in.

The main drive tonight is on the Title of the Bill. There were very strong objections to the fact that it is called the local property tax. I presume we all agree it is a tax so there are only two words in question whether it is a property tax or local. It is a property tax because it is a tax on houses.

When I introduced excise increases I did so on tobacco and alcohol but not on hydrocarbons and it was still described as an excise tax. One does not have to do everything that is subject to a particular tax before it carries the title. Because all property is not included, the argument from the early speakers tonight was that it should not be called a property tax. This is a ridiculous proposition because it is property that is being taxed and it is quite valid to call it a property tax. Taxes which are very closely analogous to this tax throughout the European Union and the world are all described as property tax. The third word is "local". Is it local or not?

It is like Shaws - almost nationwide.

It is a tax which will be used by local authorities.

We have heard that before.

In the first year 65% of it will be transferred to local authorities, because obviously administrative measures must be put in place, and this percentage will increase. Over the space of a couple of years the total amount collected through this tax will be used by local authorities to fund the services they provide. When the estimate is being prepared by the new local authorities at the end of 2014 for the 2015 financial year, the newly elected local authorities will have the discretion of plus or minus 15% on the rate of the tax. It is up to subsequent Administrations to decide whether to transfer further discretion to local authorities or whether it will remain at plus or minus 15%. It is an evolving situation. This is a major structural change in the tax system of the country and Opposition Deputies know as well as I do it has been advocated for years. What is the biggest problem in this country at present? Unemployment. What does one get if one taxes work? One gets fewer jobs. I am not putting taxes-----

Where is the money coming from?

I am not putting taxes on work.

But you have indirectly.

The money is coming from everybody who is the owner of the property-----

People who cannot afford to pay.

----but the problem previously was people such as Deputy Higgins refused to pay, but this time he will pay because it will be taken from him if he does not.

We will see about that.

This is the difference.

It is for the bondholders not local services.

We will have a situation where everybody will pay on this occasion and there will not be guys like Deputy Higgins. He is always giving out about the bondholders. He is another bondholder in a small way. He will not pay his way. He will not pay €100. He will avail of local services but he will not pay €100.

This is a transfer by the Minister from the Irish people to the bankers of Europe.

What kind of example is that to the public of Ireland?

It is an absolutely ridiculous position.

Does the Minister think everybody has a resident leprechaun with a crock of gold?

Not all of the leprechauns are outside.

I do not have the time to go into it tonight but everybody knows that property is a fixed asset. If one taxes property it is more dependable. It is not a transaction tax. It is good for the tax base and people who have assets should be taxed. This is a tax on assets and they are being taxed on this.

It is not a tax on assets.

They are liabilities for some.

Why did the Minister not tell people he was going to do this?

It is a fair tax and all those people who do not contribute on this occasion will contribute to a smaller amount. Everybody talks about fairness.

It is not a tax on assets.

I will tell you what my concept of fairness is. A different concept of fairness is being propagated by certain sections of the House which is that there is a small discrete group of extraordinarily wealthy people, and if one only took a lot of tax from them no one else would have to pay anything. This is the thesis. Fair enough, the wealthy should pay. This is why we are insisting on taking in a minimum 30% tax regardless of what tax break people have. This is fair, for those who live on my road in my housing estate fairness means everybody makes a contribution. Those people who get up in the morning, who are both working and who take their kids to the crèche or drop them at school and pass houses where people do not get up in the morning think everybody should share and should pay.

Will the Minister tax the crèche too? He taxed the hearse so he will probably tax the crèche.

We are all in the same profession, and Deputy Mattie McGrath knows what is regarded as extremely unfair in housing estates is where the local authority comes in and buys a house and puts in a person in need of social housing who pays rent there as a tenant while everybody along the road is paying mortgages. When it comes to property tax I believe everybody on the road should pay a small amount in accordance with his or her capacity to pay. This is fairness.

It is not linked to capacity to pay.

It is not in the Bill.

Will the Minister table an amendment?

Do Deputies want a row or do they want to listen to the reply? The Deputies are only wasting time.

The Deputies are propagating an argument that everybody should not pay. Go to a big corporation estate in any city. Are the Deputies telling me that people who have been on tenant purchase and have reached 85% or 90% are the only people who should pay because they are the owners and those paying rent and who are not tenant purchasers should not pay anything?

Renters do not pay.

Everybody should pay. At the end of the day everybody should make a small contribution. This is fairness.

Renters do not pay.

Settle down. Deputy Donnelly can speak when he has the floor.

Deputies Higgins and Boyd Barrett in different ways tried to rally people to some revolutionary cause. I heard Deputy Boyd Barrett last week getting very impassioned. He was calling people to the barricades. He was throwing the little streets upon the great.

Along with Deputy Mitchell.

The only problem with this call to revolution is I do not think they will get a big crowd of revolutionaries rallying behind the banner of opposing property taxes. This was never a great slogan for the left. The Deputies' ideological position seems to owe far more to Groucho Marx than Karl Marx because they are taking up ridiculous ideological positions. If Lenin heard what his successors in revolution now advocate he would have got back on the train at Finland Station and would never have gone to the Winter Palace.

What happened when Michael Collins came back?

The Deputies have put themselves in an absolutely ridiculous position.

When did Lenin advocate attacks on people's family homes and on the peasant homes?

I am all for raising debate. What is wrong with many people here tonight is they are disappointed the Government's programme is working.

Who is Groucho Marx now?

They are building political careers on failure and the misery of the people and hoping the difficulties will continue. They got a shock today because as well as the internationally trading economy going well, the domestic economy has lifted and in the third quarter of this year there was growth in the domestic economy. GDP is growing again and it will grow stronger this year than estimated in the budget. Next year's figures, on the basis of today's figures, will be stronger than what was built into the budget. This is working despite all their theory and arguments that it will never work. We are getting the country out of the misery it was in when we took it over.

What is the country? The country is families and the people.

We are developing a strong society once more-----

-----and we are keeping people at work.

More than 1.8 million people are still at work and I refuse to increase income tax on them because if one taxes work one will get less of it.

The Minister did.

The Minister just called it something else.

The commitments we made in the programme for Government-----

Have been reneged upon.

-----were not to increase rates, reduce credits or increase the bands and a separate commitment was made not to increase the marginal rate of tax.

The Minister increased VAT.

We did not do so in the previous budget and we did not do so in this one. It is working because we are not taxing work and more people are going back to work.

The Minister is being deluded by the officials beside him.

I have not heard one coherent argument tonight with one exception; Deputy Donnelly is always right. I heard no idea tonight worth anything to me as Minister for Finance.

Of course. The Minister is just doing what the bondholders want.

I heard nothing I could pick up and implement from anybody tonight-----

The Minister does not want to hear it.

-----only the same old cant and trying to build a career on the misery of the people and failure. Why do the Deputies not come in and propose something constructive?

What about the third child?

Richie Ruin is back.

There was a big argument about the audacity of the Minister for Finance to ask the Revenue Commissioners to collect taxes.

This was dreadful. What do the Deputies think the Revenue Commissioners are for?

Yes. They are adding to ordinary people's misery. They are paying tax already.

Why does Deputy McGrath think we have the Revenue Commissioners?

What about the sheriff?

The Revenue is there to collect taxes. That is its job.

They are doing a good job of it.

They are being given the job now to collect this tax-----

And the sheriff as well.

-----but there is also a commitment that it will be transferred back to the local authorities, and that is what will happen.

Deputy Bannon, in a good speech, one of the better speeches tonight-----

Deputy Bannon did not read the legislation. The Minister will be aware that the Deputy has not read the legislation.

The Minister of State for mansions.

-----spoke about having an easy payments system. In the Bill, there is an easy payments system.

Is that the better speech?

The Minister is embarrassing Deputy Bannon.

Owners, depending on the way they are paid, can pay by deduction at source. If they are paid weekly, fortnightly or monthly, whatever way they are paid, they can have deductions made accordingly.

Presumably, from their wages.

They can pay by direct debit. There are a number of ways of paying during the year.

It should be borne in mind that a total bill of €200, which is on the higher end of the scale, is €4 a week. Deputy Stanley spoke of houses that his neighbours bought for €250,000 and that are worth €60,000. If they are worth €60,000, they pay not on what they paid for them but on what is their value.

Who values them?

The tax is paid on the value. Deputy Healy-Rae implied the same thing. The tax is not on what one paid for the house. The tax is on the value of the house as will be assessed in the late spring, in March or April.

One does not own it.

If we take Deputy Stanley's example of where the house is worth €60,000, the charge will be the minimum charge of €90.

On a liability of €200,000, that is what the Minister fails to understand.

Would Deputy Pearse Doherty mind? I will let him in again in an orderly fashion.

The tax will be on the €60,000 valuation-----

It is on the average asset, which is the liability.

Irrespective of one's mortgage. That is the point.

-----and it will be €90.

On top of one's mortgage.

That is €10 less than that person's liability this year when there was a flat rate of €100 charged. There is a relationship between value and what will be charged on this occasion.

In general terms, those on higher incomes have higher-value properties. It flies in the face of reason to pretend that those on higher incomes do not have higher-value properties. The higher the value of the property, the more that one will pay.

Deputy Ross spoke on Second Stage about the deferral system and the 4% simple interest rate. He stated this would force people to sell their homes.

How would they pay?

We all agree with hyperbole as a good way of making a point on some occasions, but this is blatant exaggeration. The rate of tax is 0.18%. Even a deferral for 20 years would result in an outstanding charge of not more than 3.6% to 4% of the house value and that will not drive anyone out of his or her home.

Add them all up.

Exaggerated positions have been taken up.

I stated already that we will deal with the pyrite issue in the finance Bill. We will construct it so that those concerned do not have to pay anything. The situation regarding Priory Hall was mentioned. I regret I do not recall which Deputy referred to the issue.

Priory Hall is an unfinished estate and in the exceptions for unfinished estates, there will be no charge on Priory Hall. Priory Hall was exempt from the flat-rate tax and it will be exempt from this tax. There will be no charge in that case.

Owners will have the liability to pay and the tenants of private sector landlords may bear some of the costs if landlords pass it on. On the other hand, they may not. This will be a market issue. They will be in the same position as tenants elsewhere.

This is not simply a family-home tax. All houses owned by an individual, including holiday homes and rented property, will be subject to the charge.

Deputy Grealish mentioned somebody with 30 houses who was not paying. That is why we are bringing in the Revenue. That person will pay this year and next year because the Revenue will collect it.

These operators are getting away from the Revenue as well.

The heavy gang is back.

The Minister will get them.

The heavy gang is back. Former Minister for Justice, Mr. Paddy Cooney, is back.

One should not mention names.

This is the old tradition of a colony, that one will not obey the state because it is not our state. We have been running our own affairs since 1922.

I thought we were told the troika was ruling.

It is about time Deputy Mattie McGrath backed the Revenue-----

I have backed them all my life.

-----and, as a public representative, stated that the Revenue should collect the taxes.

I paid them too.

It is about time Deputy Mattie McGrath stated that people should pay their taxes.

I do not want the sheriff going near their doors. Will the Minister send the sheriff in as well?

One is not dealing with a foreign power anymore.

One would nearly think it.

One is dealing with our own Government since 1922.

One is dealing with the dictatorship of the financial markets.

Deputy Mattie McGrath spoke of the pike in the thatch, fellows setting fire to the thatch and all of that old grá mo chroí rhetoric.

The Minister is a waffler.

The troika has slipped the Minister's memory.

It is not grá mo chroí rhetoric; it is factual.

Deputy Mattie McGrath must be looking at black and white movies when he is selling all of that kind of stuff.

I am not. The Minister would not want to be moving with the crowd behind him. He has not many of them.

They are all right. They are quite safe.

I do not want to be taking up good debating time.

Question put:
The Committee divided: Tá, 84; Níl, 44.

  • Bannon, James.
  • Breen, Pat.
  • Bruton, Richard.
  • Burton, Joan.
  • Butler, Ray.
  • Buttimer, Jerry.
  • Byrne, Catherine.
  • Byrne, Eric.
  • Cannon, Ciarán.
  • Carey, Joe.
  • Coffey, Paudie.
  • Collins, Áine.
  • Conaghan, Michael.
  • Conlan, Seán.
  • Connaughton, Paul J.
  • Conway, Ciara.
  • Coonan, Noel.
  • Corcoran Kennedy, Marcella.
  • Costello, Joe.
  • Creed, Michael.
  • Deasy, John.
  • Deenihan, Jimmy.
  • Deering, Pat.
  • Doherty, Regina.
  • Donohoe, Paschal.
  • Dowds, Robert.
  • Doyle, Andrew.
  • Durkan, Bernard J.
  • English, Damien.
  • Farrell, Alan.
  • Feighan, Frank.
  • Fitzgerald, Frances.
  • Flanagan, Charles.
  • Flanagan, Terence.
  • Gilmore, Eamon.
  • Griffin, Brendan.
  • Harrington, Noel.
  • Harris, Simon.
  • Hayes, Tom.
  • Heydon, Martin.
  • Humphreys, Heather.
  • Humphreys, Kevin.
  • Keating, Derek.
  • Kehoe, Paul.
  • Kelly, Alan.
  • Kenny, Seán.
  • Kyne, Seán.
  • Lawlor, Anthony.
  • Lynch, Ciarán.
  • Lynch, Kathleen.
  • Lyons, John.
  • McCarthy, Michael.
  • McEntee, Shane.
  • McHugh, Joe.
  • McLoughlin, Tony.
  • McNamara, Michael.
  • Maloney, Eamonn.
  • Mathews, Peter.
  • Mitchell, Olivia.
  • Mitchell O'Connor, Mary.
  • Mulherin, Michelle.
  • Murphy, Dara.
  • Murphy, Eoghan.
  • Nash, Gerald.
  • Noonan, Michael.
  • Ó Ríordáin, Aodhán.
  • O'Donnell, Kieran.
  • O'Donovan, Patrick.
  • O'Mahony, John.
  • O'Reilly, Joe.
  • O'Sullivan, Jan.
  • Perry, John.
  • Phelan, John Paul.
  • Ring, Michael.
  • Ryan, Brendan.
  • Sherlock, Sean.
  • Spring, Arthur.
  • Stagg, Emmet.
  • Stanton, David.
  • Timmins, Billy.
  • Tuffy, Joanna.
  • Wall, Jack.
  • Walsh, Brian.
  • White, Alex.

Níl

  • Adams, Gerry.
  • Boyd Barrett, Richard.
  • Broughan, Thomas P.
  • Browne, John.
  • Collins, Joan.
  • Colreavy, Michael.
  • Cowen, Barry.
  • Crowe, Seán.
  • Daly, Clare.
  • Doherty, Pearse.
  • Donnelly, Stephen S.
  • Ellis, Dessie.
  • Ferris, Martin.
  • Fleming, Tom.
  • Grealish, Noel.
  • Halligan, John.
  • Healy, Seamus.
  • Healy-Rae, Michael.
  • Higgins, Joe.
  • Kelleher, Billy.
  • Kirk, Seamus.
  • Kitt, Michael P.
  • Mac Lochlainn, Pádraig.
  • McConalogue, Charlie.
  • McDonald, Mary Lou.
  • McGrath, Finian.
  • McGrath, Mattie.
  • McGrath, Michael.
  • McLellan, Sandra.
  • Murphy, Catherine.
  • Naughten, Denis.
  • Nulty, Patrick.
  • Ó Caoláin, Caoimhghín.
  • Ó Fearghaíl, Seán.
  • Ó Snodaigh, Aengus.
  • O'Brien, Jonathan.
  • O'Sullivan, Maureen.
  • Pringle, Thomas.
  • Ross, Shane.
  • Shortall, Róisín.
  • Smith, Brendan.
  • Stanley, Brian.
  • Tóibín, Peadar.
  • Wallace, Mick.
Tellers: Tá, Deputies Paul Kehoe and Emmet Stagg; Níl, Deputies Aengus Ó Snodaigh and Catherine Murphy.
Question declared carried.
SECTION 2

I ask Members who are not participating in the debate to please leave the Chamber. There is a time limit on this Bill.

I move amendment No. 4:

In page 10, line 12, to delete “sale;” and substitute the following:

“sale, net of the following:

(a) any outstanding liabilities on the mortgage of the relevant residential property,

(b) the total value of stamp duty paid following the purchase of the relevant residential property where it was bought on or after 2000,

(c) the value accruing to the relevant residential property arising from any adaptations to the property for the purposes of making it suitable for a person with a physical, sensory or intellectual disability or mental health difficulty to live in,

and where the relevant residential property is in negative equity, the chargeable value shall be the current market value of the relevant property on the valuation date less the value of the property at the time of purchase as expressed in the full value of the mortgage taken out at the time of purchase;”.

This amendment deals with some of the issues Members discussed in section 1 of the Bill. It goes to the crux of some of the Bill's most appalling aspects, as well as areas for which the Government has not legislated with regard to how a property is valued. Amendment No. 4 would deal with the section that defines the chargeable value and instead of stating the chargeable value is the gross market value of the house at the time of sale, it proposes it would be net of the following provisions. At the outset, I must state this amendment was submitted to the Bills Office as four separate individual amendments but without my consent, they have been rolled into a single amendment. I had intended to propose these provisions individually, as the Minister may accept one but perhaps not the others. Nevertheless, this is the manner in which the amendment has appeared on the amendment list. The amendment reads that the value would be the value at sale, "net of the following", which would be:

(a) any outstanding liabilities on the mortgage of the relevant residential property,

(b) the total value of stamp duty paid following the purchase of the relevant residential property where it was bought on or after 2000,

(c) the value accruing to the relevant residential property arising from any adaptations to the property for the purposes of making it suitable for a person with a physical, sensory or intellectual disability or mental health difficulty to live in.

The fourth point is "where the relevant residential property is in negative equity, the chargeable value shall be the current market value of the relevant property on the valuation date less the value of the property at the time of purchase as expressed in the full value of the mortgage taken out at the time of purchase".

This amendment proposes to add a new paragraph to section 2 of the Bill under the definitions of "chargeable value". In plain English, the Bill as it stands defines what is taxable as being the gross market value of the family home and this is the value the Government intends to apply to the family home tax. This definition contains one of the most unfair elements in the entire Bill and by basing the tax on the gross market value, the Government is refusing to take in a range of other issues that are central to the true valuation of the home. The Government does not take into account an outstanding mortgage or the issues of negative equity, that is, taxes on a debt instead of on an asset. While Members tried to debate this point earlier, the Minister fails to comprehend the idea that someone in a house valued at €50,000 or €60,000 might have a liability of €250,000 for that same property. In essence, the Minister proposes to tax a debt or a liability. The legislation does not take into account the huge amount of stamp duty paid by people who bought their homes at the height of the boom in particular. Moreover, the Minister does not take into account the adaptations made for a set of people who were obliged to adapt their houses to make them suitable for people with physical, sensory or intellectual disabilities or mental health difficulties.

My definition proposes to amend "chargeable value" to take into account these areas. It takes in the net value of the home and, consequently, it excludes the mortgage liability. As property prices have fallen by approximately 55%, a person in a property valued at €100,000 but with a mortgage of €200,000 does not have an asset. That person has a liability and until that liability is discharged to the bank, the bank has a call on that home. Unless this amendment is accepted, the Government basically will tax debts and liabilities for that group of people who have mortgages on such properties in excess of the market value of that property. The issue of negative equity also is dealt with through the last part of the amendment, in which the chargeable value would be the value of the house net of the mortgage, that is, the market value at the time the mortgage was taken out. In addition, those who have paid stamp duties also already have contributed in the form of property tax, as Deputy Gilmore called it before the last election. They have paid their property tax in the form of stamp duty and these people should not be punished again, particularly those who paid thousands of euro in stamp duty after 2000. I recall that during the 2007 election campaign, when the property bubble had run its course and was about to crash, the Minister for Finance and his party, the Labour Party and Fianna Fáil all scrambled to try to throw more fuel into the fire by getting involved in the auction politics of trying to reduce stamp duty in order that people would continue to buy houses at the height of the boom. I note that some of the issues and concerns with which Members are dealing in this legislation are as a result of that involvement. A friend of mine moved to Dublin and bought a two-bedroom apartment in the hope that at a later stage, he would be able to start a family, have children and so on.

They bought an apartment just to get on the property ladder, paying €450,000 for it. That couple cannot pay their mortgage and the two-bedroom apartment they live in is worth a fraction of the purchase price. Despite their not being able to pay their mortgage, it is planned to land another tax on them.

There is also a group of individuals who have had to adapt their houses. An individual living on an island off the coast of Donegal had the misfortune of having a family member in a serious accident. As the person wanted this family member at home, there was a need to expand the house and add a self-contained bedroom, changing room, etc. This has increased the market value of the house, although it came from a requirement to deal with the physical needs of a person. There are many cases like this where people have had to adapt a house to deal with such issues through no fault of their own, even if they did not wish to do so. As a result, the market value of such houses has been increased.

These constitute some of the most unfair elements in this legislation. The Minister knows I am completely opposed to the legislation and do not want to see it going through the House but I indicated on Second Stage that I would bring forward sensible amendments that would deal with some of the worst aspects of the Bill. The Minister has dismissed my comments and those of other Deputies but we will take that with a pinch of salt as he heaped praise on a party colleague who did not read the Bill. The Deputy in question called on the Minister to bring forward an easy payment mechanism despite it being contained in the Bill already. If the Deputy had read the Bill, he would have known about it.

He was more concerned with mansions.

He is the shining light as he called on the Minister to bring forward an easy payment system. He did not call on the Minister to consider the section deducting from farm payments or social welfare or the section dealing with the Revenue Commissioners' responsibilities. The Minister feels the Deputy in question is the shining light in here nonetheless.

Perhaps he should be promoted.

According to the Minister, we have not provided a pittance of information or analysis of issues that can be taken up. The Minister and the Government promised this legislation would be fair. The Bill has been discussed by the public for a long period but the Minister's arguments about resolutions are nonsense. The Minister knows the resolutions going through on the day of the budget are a separate matter and do not exist for eternity but only until the Finance Bill is enacted. The Minister is trying to play political games, which is a nonsense. This legislation does not have to go through tonight and can instead go through in January or February, leaving enough time to give people confidence about what is contained in it. We will not be able to deal with certain aspects of the Bill. The Minister has argued this is fair and promised as much but this must be a different type of fairness to what I believe in. I know the Minister's track record. I am a resident of a little parish in Gaoth Dobhair where the Minister's view of fairness hurt people many years ago, when he led the party of which he is now a member.

The Minister's argument is that this tax is fair and progressive but it is not. He should not just take my word for this. We can consider what the ESRI has indicated in its analysis of the 2013 budget. The institute did a distributional impact analysis and released an interim report. Its findings arising from the Fine Gael and Labour budget were that the 20% with the lowest income has taken a hit of just over 1%, with the 20% with the highest income taking a hit of just over 0.5%. The lowest income group has seen twice the impact from the 2013 budget as the group with the highest income. That is not Sinn Féin spin from me; there are many findings from the ESRI with which I do not agree but these findings come from Tim Callan, Claire Keane, Michael Savage and John Walsh, researchers for the ESRI.

The statistics go further and the paper indicates that property tax is a key factor in these results. It argues that for those with low incomes after housing costs, the emphasis is strongly on deferrals of property tax liability rather than income related exemptions or relief. This means the burden of the tax, deferred or otherwise, tends to be greatest on those with low incomes. That is the argument of the ESRI so despite the Minister's impassioned plea that this tax is fair - and mention of the mansion tax - it is clear that the measure is unfair and burdens those on low incomes. I am sure the Minister has read the ESRI report, which goes further by indicating that what will happen in 2014 will make it more unfair on those on the lowest incomes, as the full cost will come into play.

The Minister claimed that I and others in the Opposition have spoken in a ridiculous fashion and that the idea of not taxing homes is simply ridiculous and has no standing. Has the Minister sat down with the Taoiseach, Deputy Kenny, and told him how ridiculous he was when he made such claims? Has he told Deputy Enda Kenny how ridiculous he sounded in 1994, before people were sucked into using mortgages to purchase houses at twice the cost of the current value? Before people paid massive stamp duty he made these claims. It is very easy for the Minister to stand up and claim that we are all ridiculous on this side of the House, and that it is ridiculous to speak of a notion of leaving property untaxed. The Minister argues that this will widen the tax base, through a fixed asset, and it is good for revenue and will help get the country going. Has the Minister sat down with the Taoiseach to discuss this?

If he wishes to do so tomorrow, I will quote what he said. He stated:

It is morally unjust and unfair to tax a person's home and by doing so 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 out of people who want to own their own home and better their position.

How ridiculous was Enda Kenny to stand in this Chamber and say that?

It is a long-standing convention that we give Members their titles out of respect for the House.

How ridiculous was An Taoiseach to stand in this House and parade in to introduce the vampire tax that will suck the lifeblood from home ownership? They are his words. It will grind people into the ground. He made those comments in 1994, when there was no issue of 170,000 people in mortgage distress. There were not hundreds of thousands of people in negative equity or 87,000 people emigrating every year from our shores. We did not have six successive austerity budgets that have ground people into the ground. Nevertheless, the Taoiseach, Deputy Kenny, made those comments in 1994.

It is easy and cheap of the Minister to dismiss our comments as rhetoric. There is an idea that we want the pain inflicted by the Government on ordinary people the length and breadth of this State to continue but we do not. We are talking about my families and friends. I went to Australia at the end of August at my own expense to meet people of the emigrant community. I have done the same in London, Glasgow and Boston; I am a child of parents who had to emigrate and I feel strongly about the issue. I spent a couple of days in Perth, where a support group has been set up with over 1,000 families. Some of them are getting on really well and others are not but all of them are quite hurt and angry. These are not young people with no ties but rather families with children who had to be taken from school or who will never go to school in this State. These people told how they have a property at home and are still paying a mortgage on it, knowing they will probably never set foot in the house again.

Some of them are lucky to have the property rented out and may be able to meet some of the mortgage costs that arise, whereas others have simply abandoned their homes. The families in Perth could not find work here and are trying to make a new start and secure employment to pay for a house in which they will not set foot for many years, if ever. The Government is not satisfied that these people have emigrated because they did not have opportunities that would enable them to stay. It has not done anything to require banks to provide for debt forgiveness for people in this position and wants to slap a new property tax on them, which is immoral and unjust.

I had intended to move four amendments to address four key issues and it was not my fault that they were rolled into one. The Minister has stated he will not accept amendments tonight but will reflect on them. The idea of dealing with the net value of a house did not drop out of the sky tonight. The Minister's proposal does not make sense. While he may argue that it taxes the value of a house, the property tax will apply to people who have a €250,000 mortgage on a house valued at €100,000. As Deputy Brian Stanley noted, a person with a mortgage of €250,000 could find the house next door on the same estate being sold this week for €100,000. Families in these circumstances would like to give up their home and buy the house next door if that were possible. They have a net liability of €150,000, which means their house is not an asset but a liability. If only they could hand back the keys to the bank and buy the house next door for €100,000, but life is not that simple. It is utterly unfair to tax people with a net debt of €150,000. If they cannot repay their debt, the bank will repossess the house, yet the Government is proposing to tax the debts of people in such circumstances.

It is wrong to refuse to take into account the large amounts of stamp duty paid by people in the years after 2000. I referred to the political parties which rushed into the fold and engaged in auction politics. The Progressive Democrats Party was the first to bid in this auction, whereas Sinn Féin was the only party in the House at the time which opposed that type of politics. We pointed out that the other parties were fuelling increases in property prices. People decided not to buy houses for a period in the belief a new Government would reduce stamp duty because all the parties had agreed to do so. This encouraged people to buy houses at the height of the boom. The main political parties then left people in their current predicament. It was not simply a matter of making an individual decision to buy a house. There was a conspiracy, if one wants to use this term, involving politicians who wanted to generate revenue from stamp duty and transient taxes, developers who did not want the dream of buying homes for €400,000 and €500,000 to end and bankers who were creaming profits and receiving bonuses for giving mortgages and loans to people who should never have been given them. This troika arrangement or love affair between key politicians, banks and developers has utterly destroyed the economy.

The Minister referred to growth in gross domestic product. I can say hand on heart that no one will be more satisfied than me if we achieve GDP or GNP growth of 3%, 4% or 5%. Getting the country back on its feet is about people, not statistics. My amendment deals with people as opposed to balance sheets and accounts. People are suffering and experiencing pain. For many of them, life has not turned out as they had hoped and many are carrying crosses or bearing burdens for different reasons. It is important, therefore, that the Government does not add to their burdens.

Deputy Brian Stanley and another speaker referred to an issue I had not intended to raise, but I will do so. Last week, before a public meeting commenced, a girl who works in my office told me she did not have the skills to do a particular job. When I asked her what was wrong, she told me people had come to the office to tell her they thought they should end everything. A section of the population are in dire straits as a result of the cumulative effect of recent measures. They want to see light at the end of the tunnel. Families are being tortured by the large debts and negative equity associated with their homes. As Deputy Stephen Donnelly stated, some of them will be 55 years old before they have paid off the negative equity element of their mortgage and start paying off the true value of their homes. It is simply not on to add to their pain, even in a modest way, as the Minister will argue, by imposing a further charge of perhaps €4 per week.

The Government could accept the amendment. While I am aware that it must reach its targets, it is wrong to propose to generate €500 million in a full year through a property tax. One cannot generate revenue of this magnitude while maintaining a semblance of fairness. An estimated 177,000 families are in mortgage distress. I refer to households rather than individuals as the figure does not include children. I was fortunate to get a ticket for the all-Ireland final in Croke Park in September where I joined a crowd of 82,000 people in the stadium. The average family consists of a mother, father and two children. How many times would one fill up Croke Park with the mothers, fathers and children of households in mortgage distress? Those in this position should not be burdened with additional taxation.

The amendment, which is four measures rolled into one, is sensible and I ask the Minister to consider it. While he may dismiss Sinn Féin's proposal for a wealth tax, he could implement alternative measures. For example, he deferred until 2014 the measure in the budget dealing with pension relief. Other areas of taxation could also be tackled. I ask the Minister to be very careful. While I do not often echo the sentiments of the Taoiseach, the property tax is unfair, unjust and immoral, and it is particularly so in the case of the four groups I have set out to exempt from it.

As there will be a number of speakers, I ask Deputies to be brief.

While continuing to oppose this section and the legislation, we can certainly agree with the amendment tabled by Deputy Pearse Doherty in that it would ameliorate some of the worst injustices of the property tax. Before addressing the detail, the Minister sought to satirise the views of Deputies on the left for opposing this tax and tried to shanghai Karl Marx and Vladimir Lenin to the cause of supporting this legislation which socialists and Marxists everywhere apparently support. When I refer to "socialists" I mean real socialists, rather than the pseudo-social democrats the Minister frequently meets on his trips to mainland Europe, those who keep the name "socialist" in their party titles but engage in perpetual prostration before the speculators, financial marketeers and bondholders. It is not surprising, therefore, that they would go along with what is the wisdom of the marketplace and European establishment. Real Marxists and socialists believe one imposes progressive taxes on real surplus value and profit, not the homes of the worker or peasant, as the case may be.

A home is not a productive asset. Its upkeep costs a great deal of money. In particular, it costs for those who have mortgages, even more so for those in negative equity.

Regarding the chargeable value, the Minister tried to make a virtue out of the fact that the price of homes had fallen dramatically since the top of the bubble. This is no consolation to the hundreds of thousands of householders trapped in the nightmare of negative equity. It reminded me of a clash I had with the former Taoiseach, Mr. Bertie Ahern, in 2006 at the height of the boom. Having met a young worker and partner who had just paid €375,000 for a new modest, three-bedroom home, which was the going rate at that time, and were on a 40-year mortgage, a banker worked out for me that, at 4%, they would pay €750,000 before they would be clear of their mortgage. It seems a long time ago, but it was only six years ago, which means that there are 34 more years of that mortgage to go. If they survive, which I hope they do, they will be in their 70s.

That massive millstone around their necks was caused by speculation and profiteering to which Fine Gael never once raised its voice in opposition. Now, the Government is landing a property tax on top of them and calls it progressive. I must say that the Minister's concept of fairness is upside-down, and his belief that it is fair to crucify someone on the dole with this new property tax is incredible.

The Minister made a conscious decision as to whom he would hit. The troika, being representatives of European big business, big bankers and the financial markets, would not contemplate extra taxes on that sector despite the fact that accumulated uninvested profits in the eurozone amount to €3 trillion. These are the assets and profits that should be taxed to fill the hole.

In response to me, the Minister suggested that a 2.5% increase in corporation tax would raise €675 million. We have another model that would suggest significantly greater amounts if the effective tax rate was as it should be. Although there were and are alternatives, the Minister did not choose the fair option, but a grossly regressive situation.

The Minister stood up tonight and sought, by invoking Revenue, to terrify decent, ordinary taxpayers who in their hundreds of thousands opposed and boycotted the household tax because it was their understanding that not only was it fundamentally unjust but that it was also a bailout tax to help bondholders and bankers. The Minister's legislation smashes the pretence of a broadening of the tax base, which I am amazed that he has again tried to justify despite the fact that, in the same breath, he referred to Revenue being in charge of collecting it and putting its hand into exactly the same pot of workers' incomes or social welfare to pay this tax. The Minister must give up this pretence, yet he sought to terrify. It is clear that he is relying on fear to try to coerce people into swallowing this injustice.

In a democracy, the Government should fear the people, not the other way around, but there are states that are stronger than fear. A sense of injustice and indignation is stronger than fear. People rightly have that sense, given what has been done to our society by a tiny cabal that is being legislated for week after week in this Chamber to bail it out at the expense of low and middle income earners. The inability to pay is stronger than fear. The Minister's cynical view that people's opposition will simply melt away like snow because he waved Revenue in front of them will prove a costly miscalculation for him. The Government and Revenue will rue the day that they took this course of action. They are entering into territory where they have never been.

I call Deputy Donnelly. I ask Members to keep their comments brief. I cannot force them to do so, but there are many speakers and little time.

I support the amendment. In fairness, I give the Minister ten out of ten for style - it was a good reply - but probably a bit less for substance. His reply went to the heart of the concern held across the House, one that has been echoed by his backbenchers. He stated that this was a tax on assets, but it is not. That is the problem. Let us keep using the example used by Deputy Pearse Doherty. The purchase price of a house was €250,000 and its market value is €60,000, but what is the asset? The asset is the loan, the €250,000 that the bank owns. If we are to tax the asset, let us tax the bank. In fact, the bank owns the house and the additional €190,000.

The Minister mentioned the Thornhill report and that this tax was based on it. However, the report's recommendation was not a rate of 0.18%. As the Minister knows, it was 0.1%, a little over half of what this tax will accrue. Critically, the Thornhill report recognised the issue of stamp duty, the tens of thousands of euro already paid by people, many of whom are now in negative equity and who do not own the assets on which they are being taxed. I would be pleased if the Minister considered some of the other recommendations in the Thornhill report, for example, halving the rate, recognising stamp duty and considering the asset.

The Minister eloquently deconstructed the Title to the Bill and I accept that it is a tax on property. However, I disagree with him on "local". I can use my situation as an example. I rent where I live in Greystones. I will not need to pay the tax there, although I would do so. Like other Deputies, I am paid a very good wage for what I do. I would pay the tax to Wicklow County Council because my family and I use services provided by it, but I will not need to pay.

I own an apartment - rather, the bank owns an apartment with my name on it - in Dublin. I will pay on that Dublin property, which I do not live in, and I will not pay on the property in Wicklow, which I do live in. I will pay on negative equity in Dublin. This goes to the heart of the bizarre nature of and technical flaws within this legislation. I would not have a problem with paying a local government tax in Wicklow as a resident of Wicklow who is on a decent income, but I will not be required to do so.

I thank the Minister for his reply to my question. He stated that the amendments would be dealt with, but they will not be addressed tonight. Rather, they will be dealt with as part of the finance Bill. When he mentioned the elements that would be addressed, he did not mention negative equity.

He did not mention ability to pay or regional variations either, the latter of which might, according to Deputy Olivia Mitchell, lead to revolution in Ireland.

I will conclude with two observations which are relevant to Deputy Doherty's amendment. On Second Stage of the Bill, colleagues and I spoke about the inability to pay issue and the stress that will be placed on households as a consequence of the measure set out in this legislation. We referred to people coming into constituency offices and indicating that they were suicidal because they could see no way to meet their debt obligations. As Deputy Joe Higgins observed, people in that situation will now owe an additional debt to the Revenue Commissioners. It is bad enough to owe money to the bank; one certainly does now want to be in hock to Revenue. The Personal Insolvency Bill will be of no assistance to such persons because money owed to the State or to a local authority is exempt from any insolvency process. I ask the Minister to reflect on this issue over the break, on the assumption that these provisions will come back to the finance committee or this House.

My second observation relates to the role of the IMF on the international stage. The Minister has claimed that it is a requirement of the troika that a property tax be introduced in this country. If one studies what the IMF has done in recent decades, it is clear why it has come in for a great deal of criticism. The IMF, in fact, has made a lot of bad decisions, including privatising education in parts of Africa. In that instance, people argued locally that it should not be done because children would be pulled out of school, to which the IMF responded that according to its economic models it was the right thing to do. In other words, it was theoretically the correct action to take. The outcome, however, was that children were indeed pulled out of school because their parents did not have the money to meet the theory. Reality and practice simply did not align. Theory is all very well for steady state economies that can afford to adhere to a model which demands that the revenue base be broadened and local services improved through such measures as a property tax. In an economic crisis situation such as we are currently experiencing, however, theory will not suffice. The problem is that the IMF has been guilty time and again, all over the world and for several decades, of enforcing theoretical solutions to crises. What is happening here seems to me a case of more of the same.

In 2008, ironically, the IMF was running out of money as a consequence of the global boom. Its leaders came to Harvard Kennedy School at that time and offered a full mea culpa for its past mistakes and undertook to change its ways. The problem from their perspective was that suddenly there was no money to send their children to private school in Washington DC. That sounds flippant but was actually the case. The IMF was running out of money because it could not lend to anybody, which is how it pays for itself. Its representatives claimed to have learnt from the past, but we can see now that they did not.

I do not accept that the Minister is obliged by the agreement with the troika to introduce this tax, but I absolutely accept that the IMF is supportive of it. It is, according to its own theoretical models, the correct action to take. I conclude by asking the Minister again to reflect during the break on the points raised in this debate, namely, the inability to pay issue, the stress on households and the fact that the IMF gets it wrong most of the time when it applies theory to crisis. That approach simply does not work.

I support amendment No. 4, which is line with amendments I have tabled dealing with such issues as negative equity and stamp duty. These are issues the Fine Gael Party referred to specifically in its election manifesto - on page 27 of the document, if I recall correctly. Many people paid a great deal of attention to what the party had to say before the election and decided to elect its members to the Dáil on that basis. Those voters had an expectation that a tax on the family home would not be introduced by this Government. They paid careful attention when Fine Gael expressed concerns regarding the implications of a property tax for people who were asset rich and income poor and those who had paid sizeable sums in stamp duty in recent years. The Minister said earlier that people with larger houses tend to have larger incomes. That was not his view at the time his party manifesto was drawn up. In fact, there are many people who are asset rich and income poor and they will be impacted in precisely the way the Minister's party undertook not to permit.

One of the observations that is often made regarding Independent Members during elections is that we are not on a par with the parties because the latter put together policies and manifestos setting out clear choices for voters. The reality, however, is that we have seen the Minister for Communications, Energy and Natural Resources, Deputy Pat Rabbitte, on television in recent days telling us that such undertakings are simply what parties do before an election. The views offered by Members on this side of the House are treated by the Government as some type of comedy sketch, even though they are the same views set out in the Fine Gael manifesto before the election and to which people consequently believed that party would adhere in government. Moreover, the Fine Gael manifesto was drawn up in full knowledge of the memorandum of understanding with the troika. The party knew what was the economic situation when it put together its policies. People have an absolute right to be enraged at the difference between what was promised and what is being done by Fine Gael in government.

There was certainly an expectation that the plight of home owners in negative equity would be given a high priority by this Government, with solutions rolled out at an early stage. Many of these householders, because they are of a certain age and bought at a certain time, are the same ones whose mortgages are distressed. Instead of offering solutions for that cohort, however, the Government is lumping additional pain on it. Talking frivolously about the new tax being only €4 per week ignores the reality that some of these people are absolutely at breaking point. I do not want to keep reiterating the point regarding suicide, but I had three constituents visit me on a Friday afternoon recently who told me they were contemplating taking their own lives. What does one say to somebody who is in that horrific situation? There is a breaking point for people and large numbers in this country are getting closer to it by the day. What we see here is a situation where there are two Irelands. One of these is doing so badly that the people who make up its population are being put at real risk.

I particularly support the provision in the amendment for account to be taken in assessing the value of a property of any adaptations made to accommodate householders' disabilities. There is a great deal of irony in a situation where a household deemed eligible for a grant from a local authority - which depends, of course, on whether one lives in the right county and the local authority has a discretionary fund to enable it to draw down moneys for that purpose - to construct an extension to accommodate a family member with a disability, and whose home consequently increases in value, will be liable for a higher property tax payment, even though the adaptation made might have kept the person with the disability out of residential care. I urge the Minister to give this proposal careful consideration.

Like other speakers, I have a difficulty with the word "local" in reference to the property tax. We do not have a system of local government in this country but rather a very poor and dysfunctional system of local administration. Local decision making is essentially centralised and the notion that there will be major reform in this regard, with up to 40 councillors in a room, is nonsensical. In the absence of any steps towards meaningful local government reform, it is difficult to ask people to countenance a local property tax without making clear exceptions where there is a clear need for such. I understand, for example, that the Commission on Taxation proposed a seven-year exemption for householders who paid stamp duty in recent years. That proposal should be revisited. It is simply immoral to ask people who already essentially paid a property tax lump sum to pay it again within such a tight timeframe, especially when many such householders are burdened with 100% mortgages.

My final point relates to the role of the Revenue Commissioners in collecting the property tax. This will create a monster out of Revenue while lumping an enormous responsibility onto it. There is a breaking point in that organisation and this new role will endanger the orderly collection of other taxes. That is a matter of serious concern.

One could very easily see queues of people seeking transfers from the Revenue Commissioners. After all, they are people and they will be put on the front line in this case. I believe we will cause serious problems into the future that will go beyond a mere property tax.

Amendment No. 4 deals with negative equity, stamp duty and necessary adaptations to cater for people with disabilities and so forth. We tabled separate amendments, which will clearly not be reached, relating to negative equity in amendment No. 27 and stamp duty in amendment No. 26, so I will speak to amendment No. 4 on these issues.

The first issue is negative equity. Many speakers on this side of the House have spoken well and eloquently on the matter. There is a generation of people who are broken and destroyed. The Minister can blame the banks, the builders or Fianna Fáil, but it does not matter. They have a problem and they must deal with it. It is an extremely serious problem. We all know people who are deep in negative equity. They are people with whom we went to school or college or with whom we worked. Consider what the problem means for them. They now cannot afford to hold onto their home. They might have decided to move in with their parents or they might have had to move elsewhere to get work. They might own a house in Cork, for example, and could not get work there but managed to get work in Dublin.

The consequences for them are quite severe. First, they will lose the mortgage interest relief they enjoyed as an owner-occupier of the property. If they were fortunate enough to have a tracker rate, they will lose it because they are not occupying the property. A potential stamp duty issue arises, depending on when they first bought the property, because they have now vacated the property. They will now pay universal social charge, PRSI and income tax on the rental income they are receiving. Of course if they are also renting themselves, as many are, they will pay the private residential tenancies board, PRTB, charge and the non-principal private residence, NPPR, charge in respect of the house they are renting out.

These are the people who are in negative equity. The Minister is a wily politician and has much experience. In the last general election campaign he identified a market, targeted the people who bought their homes between 2004 and 2008 and promised them additional mortgage interest relief. He delivered on that in the Finance Act earlier this year. It was a crude measure and could have been better targeted, but the Minister implemented it and it helped many people in that category. However, he appears to be oblivious of the circumstances in which these people find themselves in respect of this property tax. As has been said, these people will spend the next 20 or 30 years getting back to a starting position.

What annoys me is that the Minister is proposing exemptions in the Bill for people who buy property now or in the next number of years. These are people who will buy at what might be the bottom of the market, although who knows whether property prices might fall by another 50% over the next two years? People who buy for those prices will get a break and will be exempt from this property tax up to 2016, but people who bought at the peak in 2006 and 2007 will get no relief. That is fundamentally unfair. If Fianna Fáil had proposed this, the Minister would say we were bailing out builders, developers and looking after our friends again. That is what the Minister is doing here, and he is ignoring the plight of the people who paid at the peak and many of whom are now in negative equity. Let us be honest, anybody who bought a house from the turn of the millennium on is now probably in negative equity. It is a major problem for them.

On the stamp duty issue, the average amount of stamp duty paid on the purchase of a house was approximately €20,000. The Thornhill report examined this and did not recommend that the Minister take that into account. The Commission on Taxation also examined it and came to a different conclusion. It recommended that the Minister make some type of credit available for people who paid a large amount of stamp duty. The people who paid the stamp duty probably will be the people who purchased their houses in recent years and probably will be in negative equity. They might have paid €20,000 to €30,000 in stamp duty. As far as they are concerned, they have paid their property tax for many years to come.

Earlier, the Minister outlined his definition of fairness. He said everybody should pay something. There is merit in that argument, but the problem with the way the Minister has structured this tax is that it is not based on capacity to pay. The Minister said people should pay something based on their capacity to pay. However, two families could be living in houses that are located side by side. One family might have two handsome incomes and be doing quite well. This property tax will be a bearable burden for them and will not cause a dramatic change in their lifestyle. The family next door, however, might have had only one income and have suffered the loss of that income due to the economic crisis and now face unemployment. The family lives in an identical house which will be valued at the same level under this tax. The family's liability for the tax will be also identical, despite the dramatically different circumstances in which both households find themselves. That is not fair. I do not agree with the Minister's definition of fairness if that is what he means. There should have been a way of taking capacity to pay into account in this proposal.

I have no problem with the third issue relating to adaptations which was outlined by Deputy Doherty.

We were doing fine until the Minister made his contribution. It was a colourful contribution. However, he totally dismissed what was said by Members on this side of the House, and that was wrong. That is not a fair way to operate when people make sensible, grounded proposals and when they articulate opinions on behalf of the people with whom they deal every day. I support the amendment proposed by Deputy Doherty.

The Minister omitted something which I hope he will discuss when he replies, and not ignore the people concerned. I and my colleagues spoke about young couples. How many times did the Minister hear the words "young couples" and "struggling young couples" from this side of the House? He completely ignored the issue in his contribution. While other Members heckled him, I did not because I was anxious to hear if he would mention young struggling couples. Does he have a concept of what is a young struggling couple? If he does, he ignored them in his contribution. As Minister for Finance, he was wrong to do so. These people are looking to the Minister and at what he says each day. They are hoping that he will help them.

I appreciate the Minister's endeavours in the past but it is not fair, right or proper to burden such young couples with a property tax at this time. It also worries me. Given that the Minister chose to omit these young couples, I wonder if he is less tuned in than Deputy Bannon was in his contribution. I am dealing with them and so are all other Members. We are here to speak up for them tonight. That is our job. If I returned to Kerry without having articulated my views on behalf of these people, I would be wrong. They must be visiting the Minister's clinics too, if he is holding such clinics and is in charge of his constituency. Perhaps as a Minister he is not, but considering his track record I believe he is. He must be hearing the horror stories from young couples. They simply cannot pay. Deputy McGrath correctly spoke about capacity to pay. However, there is ability and capacity, and the couples on whose behalf we are speaking have neither the ability nor the capacity to pay this tax.

Ultimately, they will be faced with a choice, whether to pay their mortgages or the property tax to the Government. If they do not pay the tax, the Revenue Commissioners will pursue them.

The Minister made a mock and a skit out of what the Revenue Commissioners is for. We are tax compliant and I am tax compliant. I have been dealing with the Revenue Commissioners for a long time and I know what it is like. People have other worries, such as raising young families and struggling in an ever-increasing spiral of debt, as was pointed out in Deputy Joe Higgins's example. That young couple will face paying a massive mortgage into their 70s. That is not living at all; it is suffering. When Deputy Noonan became the Minister of Finance and when Deputy Enda Kenny became Taoiseach, we were hoping they would acknowledge those people. I certainly thought the Minister for Finance would mention them when he made his contribution. I would like to hear the Minister speak about that group of people. He should not ignore them again.

I also support the amendment and many others that we will not have an opportunity to address. I do not accept it is a good idea to introduce a property tax. A property tax seems like a good idea in normal times but these are not normal times. The conditions are too poor at present. Aside from mortgage problems, negative equity is a factor and, if people are realistic, they do not own the properties. The banks own the properties and people will pay tax on them as well as arrears if they want to remain in them.

Crazy amounts of stamp duty were paid. We say that everyone in Europe pays house tax but they did not pay stamp duty on primary residences. It is unheard of in Europe. If one purchased a house in 2000 and paid €200,000, stamp duty at 6% amounts to €12,000 and, over the course of a 25-year mortgage, it becomes €25,000. This amounts to €1,000 a year and it is not as if people are not paying house tax if they are paying €1,000 a year through the mortgage.

There is a notion that the local authorities will pay the tax on social housing but the local authorities are all broke. How will they get the money? They will get money from the clients and push it onto clients. Likewise, many people purchased houses under affordable housing schemes in the past ten or 12 years. It seemed a good idea at the time because it did not seem quite so expensive. However, repayments on affordable housing have become unaffordable. I sold properties to people who purchased them under Part V through the council. They paid between €220,000 and €240,000 for two-bedroom apartments. They seemed like a bargain at the time because the full price was much more. The families qualified for the scheme because they could not afford the full price. The figure they paid became insurmountable and they will be asked to pay property tax as well.

Other speakers mentioned pyrite. Aside from properties identified as being affected by pyrite, the State has an obligation to ascertain whether a property is affected by pyrite. Many people are living in limbo, wondering whether they have pyrite, and the State has an obligation to test the houses and give them a clean bill of health or deal with the problem if it exists. The problem is not of the making of the person who bought the property.

With regard to deferrals, the Minister makes the point that it is not a massive amount over a long period of time. For many people in Ireland, the notion that they will die and have debts hanging over the house is a major issue. It may not be a large amount for some but it is for others. The concept of home and owning one's property is stronger in Ireland than in any country in Europe I have been to. There is no point in going into the reasons for it now. We have a different feeling about property, which we want to own and perceive to be ours, even if the bank has the biggest claim to it. I do not want to talk all night. I find it ridiculous that so much time can be taken up for each amendment.

The powers being given to the Revenue Commissioners are monumental. This is the most draconian legislation that has been introduced in the House because of these new powers. It represents a serious level of disconnect between how Members feel about its implementation and how ordinary people feel about it. I have often mentioned that it was a shock to come in here after spending most of my life in the real world. I find the House a bubble and there is a serious disconnect from people. I am not giving out about the Revenue Commissioners, but giving the Revenue Commissioners the power to do what it will do in the collection of this property tax is completely new and very harsh. It represents a serious disconnect.

I will be brief, but I am disappointed that there will not be an opportunity for the Minister to reply in light of the guillotine at 11 p.m. and the fact that other Members have indicated they wish to speak. I would like a commitment from the Minister that there will not be a guillotine on the Finance Bill. The Minister said many of the amendments could be discussed during the Finance Bill. I am pleased to see the Chief Whip in the Chamber. I hope we can discuss the proposal put forward by the Opposition. I notice only one speaker from Fine Gael. No Member from the Labour Party contributed-----

Is Deputy Grealish here for the Progressive Democrats?

If everyone was not making Second Stage speeches, we would have a chance to speak.

The Minister said the Revenue Commissioners could pursue landlords for the household charge. What about rogue landlords? What is to stop rogue landlords from claiming that the value of a property is €200,000 and trying to get property tax representing that value from tenants while registering the property at €100,000? Is there an avenue within the Bill for those renting properties to find out the value the landlord registered with the Revenue Commissioners? The Minister knows there are many rogue landlords. We have many in Galway. They are landlords from Dublin who send shady characters to collect rent every month. I have seen them and reported them to the Garda Síochána. What will protect the tenants with regard to the valuation? A landlord can claim he paid €500,000 for the house and wants a property tax equivalent to a value of €500,000. However, he may only value the house at €80,000.

It is difficult to make any points so late in the day. The points made by the Minister reflect a disconnect with reality that I have seldom seen. People's homes are the greatest source of financial pressure on their lives when they are struggling to meet mortgage payments. They are shackled to a property and, even if they can find someone to buy it, it would not discharge their liability on it.

In instances where they spend their whole life paying for the property, the idea that the Minister would package that and call it an asset to be milked for further taxation is a ridiculous concept. The fact he would have the neck to accuse this side of the House of being out of touch does not make any sense. The disconnect is completely on the Government side.

The Minister said he would look at some of these issues in the Finance Act. That is not good enough. It is a total cop-out, in terms of pyrite. The findings of the pyrite panel were given to Government more than six months ago. It recommended that houses with pyrite should be exempted from the property tax.

We do not know that. The Minister said houses that demonstrate pyritic heave beyond a certain certifiable amount would be looked at in the Finance Act. Who will certify it? Who will pay for testing and at what level? Already, thanks to the pyrite panel, Premier Insurance, which was remediating houses with pyritic heave, is now not doing so because those houses do not display a visible enough sign of pyrite. Will 1,000 houses or 12,000 houses be exempted? We do not know. Until those questions can be answered, people with pyrite cannot get any solace from the Minister. Will the Government pay for the testing and for every single house in an estate with pyrite? Those houses are valueless. Coincidentally, they were purchased in the commuter belt at the height of the boom and are in massive negative equity. We must address that issue.

By using the Revenue Commissioners, the Minister might succeed in putting his hands in people's pockets or pay packets and take the tax from them, but at what price? If people are down that amount of money from their wages, and already 50% of families are struggling with less than €100 a month of disposable income, something else has to give. This is a tipping point or a turning point.

This is much more like a European situation. People say we should be more like the French or the Italians. In Greece, for example, the property tax is connected to people's electricity bill. In Ireland, 30,000 houses are having their electricity disconnected every day.

Deputy, amendment No. 4 is very narrow.

It is, and it deals with properties that are struggling and home owners who are struggling in negative equity, are in arrears and have paid stamp duty.

The amendment deals with deductions from market value.

It does, and everyone else touched on every other subject under the sun, in fairness. I know it is late in the day and we are all getting grumpy. This is reflective of the fact that the Government has ruthlessly guillotined the debate on the most draconian legislation to come before the House. The Minister might think he can get away with it inside the House but he certainly will not get away with it outside it.

I call Deputy Richard Boyd Barrett.

Will I not have a chance to reply, a Leas-Cheann Comhairle?

(Interruptions).

A Leas-Cheann Comhairle, I was called to speak.

As we are discussing Deputy Doherty's amendment I will allow Deputy Boyd Barrett to speak. Many Deputies who wish to speak will not have an opportunity to do so.

It is ironic that the Minister would ask for five minutes to reply, when he has ruthlessly guillotined the debate.

I want the courtesy of a reply.

The Minister has it within his power to give himself and every other Deputy time to debate the Bill, and he has refused to give us that time. Why would we give him the time?

When I heard the Minister's response, I thought I was looking at "The Mario Rosenstock Show" or "Irish Pictorial Weekly". The Minister should audition for them-----

So should Deputy Boyd Barrett.

-----because he would be better off working for them than designing taxes like this. This is farcical.

The Deputy should go back to St. Michael's school, with his little peaked cap.

These amendments highlight how farcical, how unfair and how full of anomalies, holes and injustices the Bill is.

The same as Deputy Boyd Barrett, full of anomalies and holes.

Earlier this evening, the Minister revealed the prejudice that lies under his humour and intelligence, because he is funny and intelligent. Underlying his earlier comments was a deep prejudice. He said some people get up for work in the morning and walk past houses where other people do not get up for work in the morning, and why should they not make a contribution too? That gets to the heart of the prejudice within Fine Gael to which the Labour Party is giving cover. The people who do not have work in the morning are not staying in bed out of laziness, because they do not have to contribute or would not like to be in a position to pay their taxes and contribute to the functioning of our society. They are out of work through no fault of their own.

Good enough for them.

They are out of work through the reckless behaviour of bankers and speculators and the mismanagement of the State by Fianna Fáil and by the Opposition which did not raise a voice against Fianna Fáil's facilitation of those developers, bankers and speculators. That is why they are out of work, not in a position to pay this tax and in negative equity. They had to pay enormous sums of money in stamp duty. If they have to pay this property tax, they will be doubly taxed.

This is more than an injustice. The Minister has not answered the question. How can people who are in mortgage distress and barely able to keep up with their mortgage payments be expected to pay this tax?

The Opposition will not let me reply.

This point has been raised with the Minister time and again. He gives us a comic routine in response.

Give us another half hour.

It is not funny for the people who cannot make these payments. Government party Deputies do not like it now. They put the guillotine on.

The Deputy is breaking the law.

The Deputy is breaking the law.

The Government is breaking our economy and families and destroying lives and livelihoods. They do not like it when they cannot give a smart answer back.

(Interruptions).

The Minister also made an erroneous comment about funding local government. He did not answer the point that local government will be charged. Local authorities will get nothing from the property tax this year but they will be liable to pay for every council house in their ownership and they will load that cost onto the rents of local authority tenants. Even if they get money, they will pay back every penny they get.

The Minister said this is the alternative to what he calls a tax on work. If the property tax is to be taken out of pay packets and social welfare payments, is that not a tax on income? Of course it is. The Minister must think people are fools if they cannot figure that one out. People are not fools.

The Minister's history is wrong. He was wrong when he referred to Lenin not supporting property owners.

I thought the Taoiseach was the expert on Lenin.

The revolution in Russia was spurred on when the peasants joined up with those in the cities who were faced with injustice.

(Interruptions).

As the mover of the amendment, can I ask the Government to allow for extra time so we can hear the Minister's reply?

We will support that.

An order was made this morning. As it is now 11 p.m., I am required to put the following question in accordance with an order of the Dáil of this day: "In respect of each of the sections undisposed of, the section is hereby agreed to in Committee, the Schedule and the Title are hereby agreed to in Committee, the Bill is, accordingly, reported to the House without amendment, Fourth Stage is hereby completed and the Bill is hereby passed."

Question put.
The Dáil divided by electronic means.

As a teller in the last vote, given this is a new tax that is being imposed as a huge penalty on many households in the country, it is appropriate people be given a few more moments to reflect on the vote they are casting and I call for a vote by means other than electronic.

As Deputy Aengus Ó Snodaigh is a Whip, under Standing Order 69 he is entitled to call a vote through the lobby.

Question again put:
The Dáil divided: Tá, 86; Níl, 47.

  • Bannon, James.
  • Breen, Pat.
  • Bruton, Richard.
  • Butler, Ray.
  • Buttimer, Jerry.
  • Byrne, Catherine.
  • Byrne, Eric.
  • Cannon, Ciarán.
  • Carey, Joe.
  • Coffey, Paudie.
  • Collins, Áine.
  • Conaghan, Michael.
  • Conlan, Seán.
  • Connaughton, Paul J.
  • Conway, Ciara.
  • Coonan, Noel.
  • Corcoran Kennedy, Marcella.
  • Costello, Joe.
  • Creed, Michael.
  • Deasy, John.
  • Deenihan, Jimmy.
  • Deering, Pat.
  • Doherty, Regina.
  • Donohoe, Paschal.
  • Dowds, Robert.
  • Doyle, Andrew.
  • Durkan, Bernard J.
  • English, Damien.
  • Farrell, Alan.
  • Feighan, Frank.
  • Fitzgerald, Frances.
  • Flanagan, Charles.
  • Flanagan, Terence.
  • Gilmore, Eamon.
  • Griffin, Brendan.
  • Harrington, Noel.
  • Harris, Simon.
  • Hayes, Tom.
  • Heydon, Martin.
  • Hogan, Phil.
  • Humphreys, Heather.
  • Humphreys, Kevin.
  • Keating, Derek.
  • Kehoe, Paul.
  • Kelly, Alan.
  • Kenny, Seán.
  • Kyne, Seán.
  • Lawlor, Anthony.
  • Lynch, Ciarán.
  • Lynch, Kathleen.
  • Lyons, John.
  • McCarthy, Michael.
  • McEntee, Shane.
  • McHugh, Joe.
  • McLoughlin, Tony.
  • McNamara, Michael.
  • Maloney, Eamonn.
  • Mathews, Peter.
  • Mitchell O'Connor, Mary.
  • Mitchell, Olivia.
  • Mulherin, Michelle.
  • Murphy, Dara.
  • Murphy, Eoghan.
  • Nash, Gerald.
  • Noonan, Michael.
  • Ó Ríordáin, Aodhán.
  • O'Donnell, Kieran.
  • O'Donovan, Patrick.
  • O'Mahony, John.
  • O'Reilly, Joe.
  • O'Sullivan, Jan.
  • Perry, John.
  • Phelan, Ann.
  • Phelan, John Paul.
  • Ring, Michael.
  • Ryan, Brendan.
  • Shatter, Alan.
  • Sherlock, Sean.
  • Spring, Arthur.
  • Stagg, Emmet.
  • Stanton, David.
  • Timmins, Billy.
  • Tuffy, Joanna.
  • Wall, Jack.
  • Walsh, Brian.
  • White, Alex.

Níl

  • Adams, Gerry.
  • Boyd Barrett, Richard.
  • Broughan, Thomas P.
  • Calleary, Dara.
  • Collins, Joan.
  • Collins, Niall.
  • Colreavy, Michael.
  • Cowen, Barry.
  • Crowe, Seán.
  • Daly, Clare.
  • Doherty, Pearse.
  • Donnelly, Stephen S.
  • Dooley, Timmy.
  • Ellis, Dessie.
  • Ferris, Martin.
  • Fleming, Tom.
  • Grealish, Noel.
  • Halligan, John.
  • Healy, Seamus.
  • Healy-Rae, Michael.
  • Higgins, Joe.
  • Kelleher, Billy.
  • Kirk, Seamus.
  • Mac Lochlainn, Pádraig.
  • McConalogue, Charlie.
  • McDonald, Mary Lou.
  • McGrath, Finian.
  • McGrath, Mattie.
  • McGrath, Michael.
  • McLellan, Sandra.
  • Martin, Micheál.
  • Murphy, Catherine.
  • Naughten, Denis.
  • Nulty, Patrick.
  • Ó Caoláin, Caoimhghín.
  • Ó Fearghaíl, Seán.
  • Ó Snodaigh, Aengus.
  • O'Brien, Jonathan.
  • O'Sullivan, Maureen.
  • Pringle, Thomas.
  • Ross, Shane.
  • Shortall, Róisín.
  • Smith, Brendan.
  • Stanley, Brian.
  • Tóibín, Peadar.
  • Troy, Robert.
  • Wallace, Mick.
Tellers: Tá, Deputies Paul Kehoe and Emmet Stagg; Níl, Deputies Seán Ó Fearghaíl and Aengus Ó Snodaigh.
Question declared carried.
The Dáil adjourned at 11.25 p.m. until 10.30 a.m. on Wednesday, 19 December 2012.