Finance (Local Property Tax) (Amendment) Bill 2013: Second Stage

Minister for Finance (Deputy Michael Noonan)

I move: "That the Bill be now read a Second Time."

The Finance (Local Property Tax) Bill 2012 was enacted into law following its signature by the President on 26 December 2012. I signed the commencement order bringing the Act, other than sections 19 to 21, inclusive, into operation with effect from 1 January 2013. Sections 19 to 21, inclusive, which relate to the local adjustment factor will come into operation with effect from 1 May 2014.

The introduction of the Finance (Local Property Tax) Act 2012 met one of our programme commitments to the troika, which had to be completed by the end of 2012. To remind those in the House who appear to have forgotten, this commitment was entered into by the previous Fianna Fáil Government. Given this troika commitment and the Government's determination to fix the national finances in a manner which supports job creation, we have chosen to implement the local property tax. The latter will keep taxes on jobs such as income tax unchanged. Recent ESRI research shows that a property tax has the advantage of being six times more job-friendly than taxes on work and income. The Government is determined to do everything in its power to protect and support the creation of jobs and yesterday's employment figures for the last quarter of 2012 were encouraging, representing the first annual increase in employment recorded since 2008.

The Bill before the House is being introduced to give effect to commitments I made during the passage of Finance (Local Property Tax) Bill 2012 through the Houses last December, in addition to some further issues that have since been raised and some minor technical amendments. Before I go through the Bill in detail, I draw the attention of the House to the key amendments contained in it which I view as positive.

I have agreed with my colleague, the Minister for Environment, Community and Local Government, Deputy Phil Hogan, that houses demonstrated to be subject to a certifiable level of pyrite heave should receive an exemption from local property tax. The exemption may be claimed for three consecutive liability dates. The Minister will provide regulations stipulating how residential properties should be tested for pyrite-induced damage. The regulations will also provide for the issuing of a certificate in respect of a property that has been verified as having a level of damage significant enough to warrant exemption.

Like my colleagues in government, I am conscious of the difficulty some home owners are experiencing in meeting their mortgage obligations. Under proposed new amendments, a person who has entered into an insolvency arrangement, that is, a debt settlement arrangement or a personal insolvency arrangement, under the Personal Insolvency Act 2012 may qualify for a deferral of local property tax which falls due for payment by that person during the period for which the insolvency arrangement is in effect where a valid claim is made to the Revenue Commissioners. Further proposed new measures provide for the possibility of a deferral for liable persons who cannot, without excessive hardship, pay local property tax when it becomes payable as a consequence of a significant and unexpected financial loss or expense. This deferral will operate on a different basis from deferral arrangements provided for in the original Act. A liable person must apply in writing to the Revenue Commissioners for the deferral and meet the criteria that will be set out in guidelines to be published by the Revenue Commissioners. Deferral cannot commence until the Revenue Commissioners have received from the liable person whatever information and documentation they require to make a decision and, having made their decision, notify the liable person that a deferral is allowed, subject to whatever conditions they may impose in accordance with the guidelines they will publish.

The Bill allows for a reduction in the chargeable value of a relevant residential property that has been adapted for occupation by a disabled person where the adaptation has been grant-aided by a local authority. The reduction is limited to the lesser of the chargeable value attributable to the adaptation work carried out on the property and the maximum grant payable under the relevant local authority scheme. The relief will not apply after the sale or transfer of the property, unless the person with the disability continues to reside there. The Bill also provides for an exemption for a residential property that is purchased or adapted for use as a sole or main residence by an incapacitated individual where an award has been made by the Personal Injuries Assessment Board or a court or where a trust has been established specifically for the benefit of permanently and totally incapacitated individuals. To be exempt from payment of the local property tax, a residential property must be acquired for or adapted to make it suitable for occupation by an incapacitated individual. To avail of the exemption in cases of adaptations, the adaptation costs must be greater than 25% of the chargeable value of the property before such work took place. The exemption will no longer apply if the property is sold and the incapacitated individual no longer occupies in it as his or her sole or main residence.

The Bill will allow a personal representative of a deceased liable person where that person was the sole liable person in relation to a residential property to qualify for a deferral on making the required valid claim. The deferral may be claimed in respect of local property tax that was due and unpaid at the time of the liable person's death, that was deferred by the deceased liable person or that falls due in the three years immediately following death. The Bill limits the period of time for which personal representatives may qualify for a deferral to the years commencing with the date of death. If, however, the personal representatives are in a position to transfer the property to a beneficiary or distribute the proceeds where the property must be sold, the period of deferral will end at that point. In all cases, the personal representatives will be responsible for payment of the deferred local property tax when the period of deferral comes to an end.

I previously indicated that properties used for accommodation purposes by groups such as the Irish Girl Guides would receive an exemption from local property tax. This was on foot of a commitment I gave during the Seanad debate on the Finance (Local Property Tax) Act 2012.

The Bill now provides for an exemption for residential properties used by a charitable body for recreational activities connected with its charitable purpose where this is not done on a commercial basis.

The chargeable value of all properties for which the liable person is a local authority or an approved housing body will be deemed to be within the first valuation band for the first valuation period, that is, up to 31 October 2016. Local authorities and approved housing bodies may also defer their 2013 local property tax liability until 2014. This is to allow such bodies to put in place arrangements for the payment of the tax and the valuation of their properties.

An amendment proposed to deal with issues arising where there is a change of liable person between valuation dates has been the focus of much media and Opposition attention in recent weeks. Where the liable person changes between valuation dates, the vendor will be obliged to provide the purchaser with details of the chargeable value established on the first valuation date, with any relevant documentation. Failure to comply may result in a fine of €500 being imposed on the seller of the property. The new owner is obliged to submit a revised return and chargeable value for the next liability date where it appears to him or her that the chargeable value declared by the previous liable person was too low, given the circumstances that would have prevailed at the time the chargeable value was established.

These amendments are intended to act as a deterrent against under-declaration of the chargeable value of a relevant residential property by a liable person who intends to sell the property before the next valuation date. Contrary to media coverage and Opposition commentary, the new provision offers a level of protection for purchasers. In the absence of this amendment, a deliberate and serious under-declaration of a property's value would be binding on a new owner or liable person where a property was sold before the next valuation date.

I will now outline the main sections of the Bill. Section 1 defines the "Principal Act" as the Finance (Local Property Tax) Act 2012. Section 2 amends Part 2 of the Act by providing for exemptions from local property tax for residential properties used by a charitable body for recreational activities connected with its charitable purpose and for residential properties purchased or adapted for occupation by permanently and totally incapacitated individuals. I outlined these new exemptions.

Section 3 amends Part 2 of the Finance (Local Property Tax) Act 2012 to provide for an exemption for a temporary period of at least three years for residential properties affected by a significant level of pyrite-induced damage. Section 4 amends Part 3 of the Act to clarify how the Act will apply in a number of situations where an occupier of a residential property has not taken steps to establish title to the property.

Section 5 makes several amendments to Part 4 of the Act relating to the charging provisions such as valuation of property and the rate of tax to be applied. Paragraphs (a) and (b) make amendments to section 14 that are linked with an amendment made to section 35. As I said previously, these amendments are intended to act as a deterrent against under-declaration of the chargeable value of a relevant residential property by a liable person who intends to sell the property before the next valuation date. Paragraphs (c) to (k), inclusive, are a combination of minor technical amendments and amendments that clarify the operation of the Act regarding the local adjustment factor.

Section 6 inserts a new section 15A into the Finance (Local Property Tax) Act 2012 providing for a reduction in the chargeable value of a relevant residential property adapted for occupation by a disabled person where the adaptation has been grant-aided by a local authority. Section 7 deals with residential properties in regard to which the liable person is a local authority or an approved housing body. The chargeable value of such properties is deemed to fall into the first valuation band, that is, zero to €100,000, until 1 November 2016, the valuation date for 2017. In addition, the payable date for the 2013 local property tax liability is extended to 1 January 2014. The effect of this is that the charge on all local authority houses and the charge on voluntary houses liable to property tax will be €45 for 2013 and €90 for subsequent years until the next revaluation date. Many Deputies were concerned about this issue and that is the new legal position.

Section 8 makes several amendments to Part 7 of the Finance (Local Property Tax) Act 2012 regarding the return to be prepared and delivered to the Revenue Commissioners by a liable person. Paragraphs (a) to (c) are minor technical amendments. Paragraph (d) is linked with the amendments in section 5. Paragraph (e) substitutes more comprehensive provisions for section 38 of the Act dealing with the linkage between late submission of a local property tax return and the submission of a return for income tax or corporation tax. Late delivery of a local property tax return can result in an income tax or corporation tax surcharge under section 1084(2) of the Taxes Consolidation Act 1997. Paragraph (f) makes a minor technical amendment.

Section 9 makes several amendments to Part 8 of the Finance (Local Property Tax) Act 2012 as regards estimates and assessments of local property tax made by the Revenue Commissioners. Paragraph (b) will facilitate notification of Revenue estimates by electronic means. Paragraph (c) facilitates appeals where an assessment is made in respect of more than one property. The other amendments are technical in nature.

Section 10 amends Part 9 of the Act to allow an appeal by a liable person against a determination of the Appeal Commissioners to be heard by the Circuit Court. This is in line with appeal provisions in other areas of the tax code. Paragraph (c) amends section 63 in order that the Appeal Commissioners can require a liable person to provide information on any property, not just a relevant residential property.

Section 11 makes several amendments to Part 10 of the Act as regards the deduction of local property tax at source by employers, occupational pension providers and the Departments of Social Protection and Agriculture, Food and the Marine. Paragraph (a) amends the definition of "net emoluments" in section 64 in two respects. First, it gives priority over local property tax to deductions by an employer or occupational pension provider under a court order such as an order for the payment of maintenance, where such an order was issued before the direction to deduct local property tax was issued by the Revenue Commissioners. Second, it allows deductions of local property tax to be made from a repayment of income tax, PRSI or universal social charge by an employer or occupational pension provider to a liable person. Paragraphs (b) to (g), inclusive, make minor technical amendments to ensure the formulation used in several provisions is consistent and clear.

Section 12 makes several amendments to Part 11 of the Act regarding the collection and enforcement of local property tax by the Revenue Commissioners. Paragraph (a) amends section 119 to clarify that local property tax is due on a liability date but may be paid on or before a subsequent date. For example, the liability date for 2013 is 1 May. However, initial payments may be made on or before 1 July. Similar provisions will apply in respect of future years. Paragraph (b) amends section 120 regarding a direction given by the Revenue Commissioners to employers, occupational pension providers and the Departments of Social Protection and Agriculture, Food and the Marine to deduct local property tax at source when making payments to a liable person. New subsections (2) and (3) disapply the requirement for the Collector-General to issue a demand for outstanding tax when such a direction is given and allow the direction to be given after local property tax is due but before it is payable. However, tax need not be deducted until it is payable. Paragraphs (c) and (d) are intended to clarify the original provisions. Paragraphs (e) and (f) insert a new subsection (2) into section 126 to require a liable person who sells or otherwise transfers a relevant residential property after local property tax is due but before it is payable to pay that tax on completion of the sale or transfer. Paragraph (g) inserts a new section 147A that establishes a way of determining a liable person's local property tax liability for the purpose of charging a tax geared penalty, that is, a penalty which is a proportion of the outstanding tax rather than a flat amount.

Section 13 amends Part 12 of the Finance (Local Property Tax) Act 2012 to introduce three additional categories that may qualify for a deferral of local property tax. As I outlined earlier, these are the personal representatives of a deceased liable person, an individual who enters into an insolvency arrangement under the Personal Insolvency Act 2012 and those who satisfy the Revenue Commissioners that they have experienced a significant and unexpected financial loss or expense and where, as a consequence, payment of the tax would entail excessive hardship. Paragraphs (e), (f) and (g) of section 13 are minor technical amendments.

Section 14 amends section 1094(1) of the Taxes Consolidation Act 1997 to ensure that outstanding local property tax liabilities are taken into account when tax clearance certificates are being sought in regard to the issue of certain licences, for example, for the sale of alcohol. Section 1095 containing the general tax clearance certificate provisions already applies in relation to outstanding local property tax liabilities. Section 15 makes minor technical amendments to several parts of the Finance (Local Property Tax) Act 2012. Section 16 contains the Short Title of this Bill, that is, the Finance (Local Property Tax) (Amendment) Act 2013.

As I stated earlier, this Bill is being introduced to give effect to previous commitments I and the Government made in regard to the new local property tax. Deputies will be aware of the upcoming May liability date and filing deadlines. In advance of these dates, commencing on 11 March, the Revenue Commissioners plan to do a bulk mail issue of a local property tax guide and return form to all liable persons to assist homeowners to prepare for the new tax. The passing of this legislation at this time will provide certainty to the Revenue Commissioners. It will give homeowners time to consider the guide, to assess their liability and to make their return on time and to assist the smooth implementation of the tax. I commend the Bill to the House.

Deputy Michael McGrath

I welcome the opportunity to contribute to the Second Stage debate on the Finance (Local Property Tax) (Amendment) Bill 2013. It is little surprise to me and to many colleagues in this House that just two months after the property tax legislation was rushed through the Dáil and the Seanad, we are here debating an amendment Bill to it. The original legislation was unsatisfactory for a number of reasons, not least the fact that it was rushed through the Oireachtas, and a number of deficiencies have subsequently come to light. During the debate last December on the property tax Bill itself, the Opposition tabled 88 amendments but none was accepted by the Government. In fact, only three hours were allowed for the Committee Stage debate on one of the most important pieces of legislation this Oireachtas will consider in this term. Today, the Government is attempting to right some of the obvious wrongs which have been identified in that legislation. I will try to deal with some of these but first I would like to say a few words about the economic, social and political context in which this tax is being introduced.

Even with the passage of this Bill, the property tax will remain a deeply unfair tax which will disproportionately hit low and middle income families. In his opening remarks, the Minister accused some of us on this side of the House of having forgotten commitments made by the previous Government to the troika but we have not forgotten them at all. The Minister does not like to be reminded of the Fine Gael manifesto, which Fine Gael put before the people two years ago in the election and campaigned on that basis. The Minister made the point very clearly at that time that an annual recurring residential property tax on the family home was unfair and that what would be viewed as fair in south Dublin might be viewed as unworkable in rural Clare. I am sure some of the Minister's colleagues sitting behind him might agree with that. He went on to say that in this context, Fine Gael would empower local authorities to put in place, following the 2014 local elections, a number of alternatives which would include local user charges for waste and the option of a site sale profits tax and that all of these options would be fairer and more economically sensible than an annual recurring property tax. That was the Fine Gael position going into the election and the memorandum of understanding had been published a number of months earlier. Those are the facts and they must be put on the record.

The Labour Party took a different position. In the election two years ago, it accepted that there was a need for a site value charge but it went on to state that it must be done on a fair basis which takes account of the value of property in different regions, which this tax does, the need to exempt some categories of home owners and the need to take account of those who paid large sums in stamp duty or who are in negative equity and that any charge of this sort, therefore, could not be put in place before 2014. That is the political backdrop in regard to Fine Gael and the Labour Party. It is absolutely clear that neither party has a mandate to introduce the property tax in this form, notwithstanding the commitment in the memorandum of understanding to introduce a site value tax during the course of the programme.

The backdrop for introducing this tax has worsened over the past two months. Yesterday, we got new figures from the CSO on the housing market. The data point to a housing market that is quite literally moribund. House prices have fallen in the past two months nationally, bringing a halt to what appeared to be a small recovery in prices. The small move up in prices towards the end of 2012 seems to have been entirely driven by a rush to avail of mortgage interest relief before its abolition for first-time buyers. House prices are approximately 50% lower than their peak level in 2007, with prices in Dublin recording the biggest drop at 54% below peak levels and apartments down a staggering 61%.

We all acknowledge that some recovery in the level of housing transactions is key to the recovery of this economy. The Government implicitly accepted this when it introduced, over the past couple of budgets, a range of measures designed to stimulate the sector, including the capital gains tax relief for properties purchased before the end of 2013. However, to date, these measures are failing to lift the market in any meaningful way. Only 8,500 new homes were built in 2012, down 20% on the previous year which was itself the lowest since data were first recorded in 1970.

We saw from the quarterly household labour market data that, notwithstanding the modest overall improvement in the number of people at work, which is to be welcomed, employment continues to contract in the construction sector. The introduction of a property tax is likely to delay any recovery in the housing market and by extension, further damage the domestic economy.

Yesterday, during parliamentary questions, I emphasised the issue of ability to pay and the need for the Minister to revisit, at a minimum, the income thresholds within which people will be entitled to get a deferral of this tax. When one breaks it down on a per week basis, an individual earning anything more than €288 per week - aside from the mortgage issue, to which I will return - will not be entitled even to a deferral. A family on €480 per week gross will not be entitled to defer this tax. Those thresholds are ridiculously low and need to be revisited. I hope the Minister intends to do so on Tuesday when we return to this issue.

Last December, I took issue with the Minister's contention that the property tax was fair, progressive and that the wealthiest would pay the most. That is simply not the case. It is the case if one measures wealth as the gross value of the property but that is not the measure of wealth. It would be one thing if the Minister allowed the value of the mortgage to be off set because then it would be a net asset with which one was dealing. However, this tax takes no account whatsoever of the income profile of the household. That is one of the fundamental weaknesses and flaws running through this entire proposal.

Houses do not represent wealth in Ireland today. For most people, they represent debt. An annual property charge is essentially designed to be a form of wealth tax. In the current Irish mortgage situation, it would, in a great many cases, be a tax on debt. The reality for many people is that their home is no longer a store of wealth as its value has fallen massively in recent times. According to a recent report by Davy stockbrokers, more than 50% of residential mortgages are in negative equity, including the majority of those taken out since the turn of the millennium. Imposing a recurring tax on an asset which has a negative net worth in circumstances where people have no option to dispose of the asset is fundamentally unfair and will have a disproportionate effect on people who bought their houses when prices were at their highest.

The Government intends to raise up to €0.5 billion from this tax in a full year, but has not provided any meaningful exemptions from the tax. It will hammer those already struggling to keep the household finances in the black.

This is not the right time to land people with such a deeply unfair, hefty charge on the family home, particularly in light of the spiralling mortgage arrears crisis which we have debated many times in this House, including yesterday. As the Minister knows, the most recent data on residential mortgages shows that 86,000 residential mortgage accounts were in arrears of over 90 days at the end of last September. That is an increase from 81,000. These borrowers collectively owe over €15 billion. The upward trend in arrears has slowed marginally, but getting worse more slowly is not the same as getting better. In fact, when one probes those details a little further, one finds that approximately 45,000 residential mortgages are now in arrears of more than 12 months and almost half of those have not been paid for two years. The reality is that many of those mortgages will simply not be regularised without being fundamentally restructured.

In fairness, I believe struggling mortgage holders have an ally in the Governor of the Central Bank, Professor Patrick Honohan. He has been vocal in calling for more action to be taken. In a recent interview on "The Week in Politics" programme, he said that Central Bank officials were literally tearing their hair out at the lack of progress in dealing with mortgage arrears. While his intentions and, I believe, the intentions of the Government are clearly good, what we need now more than anything is action from the banks, because when the mortgage arrears data is examined in more detail it shows that, by value, almost 30% of residential mortgages are either in arrears or have been restructured. Hitting these households at this time with an additional charge risks driving them deeper into financial difficulties. People who are 188 days or more behind in their mortgage payments are most likely to be unable to pay any form of house tax.

Not only can people not afford this tax, but the tax will also suffocate further a property market that is on its knees and reduce domestic spending, thus damaging the domestic economy. Elderly people living in properties they worked hard to own and in which they raised their families are now being driven out of them by an onerous tax on the very homes they committed their working lives to build.

Yesterday, I told the Minister that I deal with a number of individual mortgage cases. I will bring two examples to his attention now. They involve people who contacted me with regard to the property tax. Both cases involve people who bought their properties at or close to the peak of the market. One couple got a mortgage of €270,000 from the bank in 2006 to buy their house. Both were working in the public sector. The bank stretched their repayment capacity to such an extent that it advised the couple to go on interest-only repayments for a period of two years. That was at the start of the mortgage term, when the couple were borrowed to the hilt. The couple managed to keep up the interest-only payments for the following two to three years. In 2009 and 2010, however, the cutbacks in the public sector began to affect them and they ran into difficulty with their mortgage. They were allowed to remain on interest-only repayments for a period of time. One of them became quite ill, is unable to work at present and might not be able to work for some time to come. The other person has suffered a dramatic drop in their wages.

The couple are now paying approximately €500 per month towards their mortgage when they should be paying well over €1,000 per month, if they were paying both interest and capital. They are a very solid couple. They do not drink or smoke. That is the reality with which they are living. Under the Minister's proposals I believe they will be entitled to a deferral up to 2017, but he is not giving them a permanent or indefinite deferral. It is a time limited deferral and carries a penalty interest rate of 4%. I realise it is simple interest, not compound interest, but it means the liability will increase.

The second couple I am dealing with bought a property for €330,000 at the peak of the market. Again, they were a very prudent couple. They had saved a large amount of money and got help from their families. They took out a mortgage of only €240,000. However, they are now only able to pay a little over €100 per month on their mortgage. One of them is not working at present due to illness and the other person is now self-employed, having lost his job, and trying to make ends meet. How will these people be able to pay a property tax for the foreseeable future? I do not believe they will be able to pay it. Exemptions should have been given to people who are in genuinely difficult circumstances, where the capacity to pay this tax simply does not exist.

There is also the issue of unfinished estates. The Minister for the Environment, Community and Local Government, Deputy Phil Hogan, is drawing up a revised list of unfinished estates which will be exempt from this property tax. However, I understand the list will be quite different from the list of unfinished estates which were exempt from the household charge. In briefings given by some local authorities to councillors, the councillors were advised that a far more forensic approach will be taken to identifying not just the estates but also the houses within the estates that should be exempt. What appears to be proposed is that if one is living in a house between Nos. 1 to 20, and the entrance to the estate is finished, the street light is working, the footpath has been completed and there is a bit of grass across the road, one will have to pay the property tax. However, if one is living in a house between Nos. 21 to 40 and that part of the estate is not finished, one will qualify for an exemption. That appears to be what is envisaged. Those are the directions, as I understand it, the Department of the Environment, Community and Local Government has given to local authorities, because that is what the authorities have conveyed in briefings for the councillors. Even within unfinished housing estates, therefore, people who have had the misfortune of buying in estates where the developers have gone bust, the estates have not been finished and the bonds could well be lodged with IBRC and are now valueless, will now have to pay the property tax. When the list of estates and the list of the house numbers within each estate are produced, there will be a great deal of trouble. The Minister will have to be careful about how he addresses that issue in the next few weeks.

I will now discuss some of what is contained in this amendment Bill and, equally important, what is not contained in it. With regard to the powers of the Revenue Commissioners, the amendment being introduced to give the Revenue Commissioners the power to defer property tax payments for people who have suffered a significant and unexpected financial loss or expense is nothing more than a fig leaf. It is a sham to deflect attention being focused on the lack of fairness inherent in the legislation. The briefing supplied with the Bill states that the deferral cannot commence until the Revenue Commissioners have received from a liable person whatever information and documentation they require to make a decision and, having made that decision, notify the liable person that a deferral is allowed. In practical terms, we have no idea how many people might qualify for this deferral. I suspect that it will be such a convoluted and difficult process that many people who deserve to have such a deferral will not be given the relief because they will simply be deterred from applying. The chairperson of the Revenue Commissioners recently appeared before the Committee of Public Accounts and made it clear that what is not involved here is people who are struggling each week to make ends meet and pay their bills. What is envisaged in this amendment is people who experience a sudden and unexpected shock in their lives which results in financial distress. It does not deal, in a genuine way, with the issue of ability to pay.

It is difficult to believe that the Minister set out to make the tax even more unpopular than it already was, but he certainly appears to be doing that based on the additional reporting requirements provided for in the legislation. I listened carefully to what he said about the obligation on the purchaser of a property to report to the Revenue Commissioners in a situation where there has been an under-declaration by the previous owner. He made the point that this protects the purchaser from having to deal with any legacy liability on the property. There should not be a legacy liability for the purchaser of a property who purchases a house in those circumstances. If the vendor has under-declared the valuation of the property over a number of years, the liability should rest with the vendor. The Revenue Commissioners have extensive powers and they are well able to pursue the vendor for that. There should not be an onerous requirement on the new purchaser to report that issue to the Revenue Commissioners.

In addition, the powers given to the Revenue Commissioners in the original legislation to deduct the property tax from weekly welfare payments, a person's payslip or, indeed, to execute a direct deduction from somebody's bank account will cause enormous problems. For many people who genuinely cannot afford to pay the tax, the Revenue Commissioners will be dipping into bank accounts that are already overdrawn or in the red. They will have to intervene in that way.

I welcome the concession granting a three year exemption to houses affected by pyrite.

In my view, the Minister must go further. People living on estates affected by pyrite whose houses are not themselves affected do not receive an exemption. In most cases, those people will be unable to sell their houses as no bank will provide a mortgage to a prospective purchaser in such circumstances. The cost of proving pyrite damage may be prohibitive even though a visual examination would show its obvious presence.

The Minister has granted a limited exemption to charities including scouting and girl guide associations which provide weekend-type accommodation to their members. This is welcome. Charities fulfil an important societal need, particularly at the present time. Their State funding has been cut and donations are well down. The exemption in the original Bill is only for charities that use properties solely or primarily to provide special needs accommodation. Special needs accommodation is defined as "accommodation provided to persons who by reason of old age, physical or mental disability or other cause require special accommodation and support to enable them to live in the community". The definition is potentially too narrow. We would appreciate if the Minister could clarify whether it is intended that the exemption will also apply to persons with special needs whose accommodation is of a type which could not be considered to be in the community. Examples include the accommodation of very vulnerable people such as those living in Stewarts Hospital, which assists people with a range of intellectual disabilities, some of whom can interact with the community and some of whom cannot. Other examples include the facilities attached to Crumlin Children's Hospital in Ronald McDonald House and the accommodation at Temple Street Children's Hospital for the parents of very sick children. We are concerned that these facilities may not meet the definition in the legislation. A requirement to pay the property tax would place an unfair burden on the providers of these services.

If the property tax is to work in practice, it is essential that a clear and detailed guide to valuation is provided to underpin compliance and ensure property owners pay the appropriate level of tax. In reality, the Revenue Commissioners will say one's house has a particular valuation and it will be up to one's self to show that it is worth less than that, if it is. The cost of a professional valuation is likely to be prohibitive and in many cases people will simply give in and pay the Revenue Commissioners' assessment. Consumers often complain, for example, about the high valuation for VRT purposes imposed by the Revenue Commissioners in respect of imported cars. The economist Ronan Lyons has suggested this could be avoided if people were given a tax credit to have their homes assessed by a qualified professional working to a standardised national checklist, as happens in the BER scheme. This scheme would provide the Revenue Commissioners in the first year with the necessary information on dwelling type, size, age, location and other factors affecting value in order to perform meaningful auditing. The newly established property price register does not assist in this regard as it contains none of the property characteristics required to assess value. The register will be of limited use to most people in determining their liability under the taxation regime.

The Bill represents a missed opportunity. It is Fianna Fáil's genuine view that this is not the right time to introduce a tax on family homes. We published alternative proposals which would have raised at least as much revenue in 2013 as the property tax. Given that the Government has enacted the primary legislation required to introduce the tax, it will rue the opportunity it has missed with the Bill before the House now. The Government could have established a much fairer basis for the charge if it had adopted some of the measures Fianna Fáil proposed. It is not too late. Committee, Report and Final Stages take place next week and we have tabled, as have other Opposition parties and groupings, amendments which will make the tax fairer and help to achieve a greater degree of public acceptance.

In the next couple of weeks, the Revenue Commissioners will start to issue letters to householders nationally. People are very fearful. An elderly man called my office the other day to express his fear that he would lose his home because he is not able to pay the property tax. While we reassured him that will not be the case, it is a measure of the fear and anxiety that exists. People are genuinely finding things tough, as the Minister knows well. The thresholds he has set for a deferral are miserly and need to be reviewed. I do not know when was the last time a Cabinet member tried to live with his or her family on €480 a week. Half of that sum will be spent on essential groceries alone, with a further requirement to pay for electricity, gas and other essential household bills, before one even considers the mortgage. The thresholds must be revised. While the Minister is clearly not going to reverse the decision to introduce the tax, he could certainly make it far more palatable and fair than is provided for currently. I hope that in the debate on Tuesday some of the amendments that have been proposed will be accepted.

Deputy Pearse Doherty

Ní bheidh iontas ar bith ar an Aire ná ar an Rialtas go bhfuil Sinn Féin go huile agus go hiomlán in éadan an muirear teaghlaigh seo atá á ghearradh ag an Rialtas, cé gur thug sé an gealltanas sa toghchán deireanach nach mbeadh sé ag cur i bhfeidhm an pholasaí lochtach a bhí curtha chun tosaigh ag Páirtí Fhianna Fáil nuair a bhí sé san Rialtas.

Taobh istigh de deich lá, beidh litreacha ag dul tríd doirse chuig na céadta míle duine ag iarraidh orthu níos mó airgid a íoc chuig an Stát mar gheall go bhfuil teach acu. Níl dabht ar bith ach go gcuirfidh seo go leor daoine, go háirithe iad sin atá ar an ngannchuid, i gcruachás nó a bhfuil fadhb acu le morgáistí nó le bia a chur ar an mbord do pháistí nó éadaí a chur ar dhroim mac nó iníon, thar an imeall. Cé go bhfuil an céad reachtaíocht tagtha chun tosaigh ag an Rialtas ó dheireadh na bliana seo caite agus go bhfuil, anois, leasú á chur le sin leis an mBille seo, tá am go fóill ag an Rialtas an rud ceart a dhéanamh agus deireadh a chur leis an cháin seo atá á ghearradh ar thithe teaghlaigh agus polasaí úr a thabhairt isteach lenar féidir linn an t-airgead atá de dhíth a thabhairt isteach. Mar atá molta ag an bhFreasúra, tá go leor dóigheanna eile inar féidir linn an t-airgead céanna a thabhairt isteach gan an buille trom seo a chur ar ghnáth muintir na tíre.

On Saturday, 8 March 2013, the Revenue Commissioners will deliver to An Post hundreds of thousands of letters to be distributed from the following Monday. Yet another demand for money to pay for the sins of others will be delivered to all eligible and, indeed, some ineligible households across the State from the Government, which is fixated on austerity and the implementation of the failed policies of Fianna Fáil. Only last week, 70,000 home owners heard that AIB is to increase its variable interest rate on mortgages. The demand comes at a time when one in four domestic mortgages is in distress. The last thing 180,000 holders of distressed mortgages need is another letter bearing unsustainable demands. It will be a tipping point for the 1.6 million people the Irish League of Credit Unions showed have only €50 at the end of the month after paying essential bills. If a huge section of society faces this problem, why are we discussing tinkering with the Bill to make it worse in some ways or better in others, when we should really scrap it and find a more progressive way to bring in revenue to reduce our deficit without placing a burden on those who cannot bear it?

How many more people does the Minister for Finance, Deputy Michael Noonan, believe the tax will tip into mortgage arrears? How much more money will it suck out of the real economy? Yesterday, the Minister replied to a parliamentary question of mine to say that the Government had looked at the effect its proposal will have on mortgage arrears. I dispute that assertion. There is no way the Government can decide that it is fair to introduce a tax on people who find it difficult to pay their mortgages, carry out some assessment and go ahead. The Minister knows there are alternatives to this type of family home tax. Sinn Féin has put forward a suite of alternatives. The Department of Finance provided the figures in answer to parliamentary questions on different taxation measures. To be fair, the Department did not cost a wealth tax measure, which would be a properly progressive tax on property and would bring in the same amount of money the Government plans to generate through its family home tax. The difference is that it would not break the backs of working families.

Instead, the Minister plans to get his hands on the disposable income of people who simply do not have it to give. We all know that Fianna Fáil signed up to this tax and that it was part of its 2012 pre-budget submission, its four year plan and negotiations with the troika and that it has no ideological opposition to taxing the family home.

Deputy Michael McGrath

Neither does Sinn Féin.

Deputy Pearse Doherty

Its only objection is that it is not in government to do it. Sinn Féin has no issue whatsoever with taxing wealth - property is a part of wealth - but we are completely opposed to taxing the family home, regardless of income or wealth. If we want to have a wealth tax, let us tax the yachts, helicopters and investments of the wealthy and set a threshold for an exemption up to a certain point. That would be a real wealth tax. Let us not pretend that what we are discussing is a type of wealth tax. Some of Europe's most progressive countries, including Sweden and Norway, operate a wealth tax regime that works. At least Fianna Fáil was in favour of this type of tax regime before the election, but the Minister and the Government were not and neither was the Labour Party. Why has it capitulated to the failed policies of the past?

As I was browsing the Internet last night, I came across a leaflet which had been issued by the Minister's party in 1994. It published the leaflet in January 1994 and the Minister was the party's finance spokesperson in the preceding year. The anti-property tax leaflet was entitled, They Will Tax the Roof over Your Head, and much of its content is relevant today. One heading asks, "Why is Fine Gael so Opposed to this Family Home Tax?" Fine Gael did not call it a property tax, for which Fianna Fáil was arguing at the time, but a family home tax because it knew that was what it was and it was right. The answer was: "It is anti-family because it is based on the total income of the family". It added that it could encourage mothers and fathers to send their sons and daughters out of the family home. I am not sure about that, but that was Fine Gael's first bullet point. The next described it as "an anti-Dublin tax. Because of higher land values in Dublin, the majority of those liable for the family home tax will be in Dublin". That is very similar to the situation today. It continued: "It is a double taxation on people who have already paid their full tax liabilities in PRSI and PAYE". The situation today is the exact same and the only difference is that people have paid massive sums in stamp duty also. It was described as "anti-home ownership. The Family Home Tax ... will discourage people from buying their own homes". The same applies today. It continued: "It is against the spirit of self-reliance which Fine Gael encourages". Obviously, the party has ditched this, but it went on to state, "It's Just not Fair". I have the leaflet in front of me. This is based on Fianna Fáil's and the Labour Party's attempt to bring in the charge and the leaflet asks, "Could you trust either Labour or Fianna Fáil again? They have broken their promises and do not deserve your trust. So much for their much-vaunted commitment to 'change'!" That is what the Minister's party campaigned on. Every single one of those policies are the same as those included in the Bill. It also stated: "The Residential Property Tax will not help to relieve the burden of taxation on income. The additional Family Home Tax will not create one extra job and makes no contribution whatever to tax reform. Fine Gael will be opposing the imposition of the Family Home Tax by every means possible". It finishes with the line, "Don't let them get away with it! Join Fine Gael".

Every one of those points is relevant today. They are probably more relevant today than in 1994, given that we are in the middle of a massive crisis in terms of mortgage distress. Everyone in this House knows that people in high places connived with banking officials to assist individuals to buy homes that they should never have been allowed to buy. They broke, bent and distorted the rules in such a way that mortgages were given to individuals who should never have had them, yet they are sitting back comfortably and the individual with the loan is taking all of the responsibility.

I recognise that the Bill which amends the original Act brings forward some reliefs, in the narrowest sense of the word. There is a lesson to be learned. The Minister rushed through the last Bill with hardly any debate. There was only one division on an amendment - mine. The rest tabled by us, Fianna Fáil and Independent Members were not even reached and debated. Now we have an amending Bill even before the original Act is in operation. Next Tuesday will see a repeat of the earlier debate and some of the topics we will discuss are proposals we have been articulating, or that I, in particular, articulated, during the last debate but which the Minister dismissed and rubbished because he wanted to get the Bill through as quickly as possible.

Although there are some reliefs, in essence, the family home tax is unfair. It contains only the tiniest elements of the concept that one should pay according to one's ability to pay and in these areas it is just a case of deferring the payments for several years. There are gaping inadequacies in the Bill which is nowhere near satisfying the criteria for fairness. Where are the breaks for those who have paid stamp duty? The programme for Government committed to taking on board the needs of those in mortgage distress when proposing a site value tax. The Minister is not telling me that the amendment in respect of personal insolvency deals with that matter. That is a complete and utter farce. Those who have paid massive amounts of stamp duty should not be liable for this family home tax. I will table an amendment on Committee Stage to propose that the outstanding liability on a mortgage be taken into account when calculating the chargeable value and that that portion be exempt also for those who have paid stamp duty. For properties bought after 2000 stamp duty should be taken into account. Likewise in the case of those in negative equity.

These would be small steps which would prevent many already burdened and unsustainable mortgages from sinking completely under this new tax. The Minister's amendments show that his only interest is in recouping the maximum amount for the coffers, regardless of the impact on society and families. Despite our complete opposition to the Bill, we will not just walk away from it. We will table constructive amendments to try to shape it in order that it will be less destructive and more economically and socially fair. We would exempt local authority housing, not for profit housing bodies and households with restructured mortgages in arrears. We would exclude those living solely on State support, including social welfare and State pension payments.

It is welcome that the Minister has begun to address the issue of pyrite homes. Section 3 allows for a three year break in the case of homes damaged by pyrite. With others, I proposed such a break during the process of legislating for this tax. It shows the arrogance of the Government that it refused to incorporate it, but it has now backtracked. Questions remain, however, about this exemption. I understand regulations to exempt these homes will not be ready by the time Revenue issues the letters which will start to go out in the next ten days. Residents will receive these bills but will not know what the regulations will entail and will be left in limbo for some time. It is bad practice when there is a burning issue such as pyrite homes that the Minister can put through legislation to enable exemptions, yet we are asked to support it on blind faith. The devil is always in the detail. It is also the case that those whose homes are affected by pyrite, a serious issue, who decide to repair them by underpinning which costs a substantial sum will not be exempt. A person whose house is damaged by pyrite who spends tens of thousands of euro of his or her income to make it fit for purpose will not be eligible for the exemption under this clause, which is both serious and unfair.

This issue needs to be rectified by the Minister before the Bill is enacted to ensure it is not allowed to fester.

I welcome the exemption for properties used by charities. However, there is still some detail that we will need to tease out on Committee Stage.

Section 6 allows for relief on renovations made by disabled residents. This is a provision I brought forward on Committee Stage last year when the original legislation was going through. However, it was dismissed at the time. This is not the way to do politics. If a good and sensible proposal is made by the Opposition, it should at least be considered by the Government. I acknowledge that the Minister is considering it now, but at the time he should have said this was a sensible proposal and examined it. While it is welcome that this provision has been included in this amending legislation, I have serious concerns about what the Minister has done with it because he has not gone far enough.

The exemption is linked with homes which were adapted for a disabled resident and received a housing adaptation grant for people with a disability or a disabled person's grant and an essential repairs grant. The problem is that as these grants are means-tested, certain individuals did not receive them. For example, a mother and father may have worked in a bank and the construction industry, respectively. Their son or daughter may have had a serious accident and, subsequently, he or she was required to adapt the house. This may have involved building on an additional room or a bathroom, or modifications to allow for wheelchair accessibility. Depending on the age of the son or daughter, he or she may have wanted to live independently and the alterations may have required a separate kitchen to be added on to the house. All of this would have cost a substantial amount of money. However, as the parents were working at time, they were not eligible for the grants. Today, because of the downturn in their respective sectors, they may be both unemployed, but they are still not entitled to a deferral. The value of the adaptions which may have come to €50,000 in order that their child could be accommodated in their home will be taken into consideration in the chargeable value of their house for the purposes of this tax as a deferral is based on someone having a grant. Even for those who did receive a grant, it must be remembered that it is based on a tiered structure. Accordingly, it depended on one's income, even if one was under the threshold, and one might just have received a portion of the grant. For example, the adaptions may have cost €50,000, but a person only received a maximum grant of €12,000. Under this section, the chargeable value that can be deducted from the value of the house is €12,000, despite the fact that more was required to fund the alterations.

What about a case where the mother and father have separated? Of course, the father would have had to adapt his home to allow access for the child, but it will not be included under this exemption because it applies only to the house in which the child permanently resides. There are also issues concerning local authority housing being included in this tax, which we oppose.

The Minister has made an unpopular tax even more unpopular. The snitch clause is unacceptable. It is not right that he is asking citizens to inform on their neighbours. That is what Revenue is there for. Let citizens comply with this tax, if they so wish. It will be the law of the State and for them to comply with it. When they buy a property, they will have to include its value. It should be up to Revenue to calculate if someone has underdeclared. It is not right to impose legally a penalty if people do not snitch on their neighbours.

The deferral of payments is nothing more than a sop. There are two categories who cannot afford to pay this charge. Those whom the Minister has recognised as not being able to pay will be given a prize of a 4% interest rate. The second group who cannot afford to pay because they will opt to pay the mortgage first, which has not been recognised by the Minister, will be penalised by the imposition of an 8% interest charge. Recently, a couple who are both gardaí told me of the impact Croke Park nua would have on them. They live in Dublin, have a large mortgage, pay huge management fees on their house, but they are getting by and able to pay their mortgage. The new Croke Park deal is going to hit them hard, but they still believe they will be able to get by. They have a young child less than one year old, but they cannot afford child care. If they were to pay for child care when they were working, they would not be able to pay the mortgage and be in arrears. Therefore, they work back to back. One comes off shift and hands the baby to the other while the other goes back on shift. That is what is happening for some of the families that are just getting by. The Minister does not recognise them and believes they are still able to pay this tax. They are prioritising everything else above defaulting on their loans. The majority will want to abide by the law and pay this tax. However, there will be those who will not be able to do so and whom the Minister will force into non-compliance with Revenue. Allowing Revenue to dip into their bank accounts and social welfare payments is completely unacceptable. Sinn Féin will be bringing forward a Bill to repeal this legislation. Even at this late stage, will the Minister reconsider to come up with a fairer way of creating this revenue stream for the State to reduce the deficit and not impose this hardship on families across the State?

Deputy Brian Stanley

We are debating this Bill because the Minister for Finance rushed the original legislation through on the last sitting of the Dáil before the Christmas break. The Bill put through then was fundamentally flawed. This amending legislation is also fundamentally flawed. It is a sign of desperation when the ink is barely dry on the original Bill that we are back here amending it when it should be shredded. In the rush to guillotine the debate in December the Minister forgot about exemptions for properties used by charities, those with pyrite-induced damage and those renovated for disabled residents.

The Minister also proposes that local authority housing will be treated at the lowest value of €100,000. Section 7 outlines his attempt to put a positive spin on this exemption which has managed to turn reality into a virtue. Both he and his officials know that valuing local authority houses in the first category is not fair. Apart from some in Dublin, local authority houses in the remaining 25 counties are not worth over €100,000. In Portlaoise, most are valued at an average figure of €60,000. I have even seen ex-local authority houses sold for €22,000 in recent months. The same is true in south Kildare and Offaly.

Revenue will issue guidelines on setting the value of one's house. If I am buying a house off Michael Noonan, he will have it valued using Revenue's guidelines. However, under this amending legislation, he wants the purchaser to let Revenue know if the house is worth more. It is shameful trying to turn one person against another in such a situation where the property has already been valued.

In 11 days time value guideline letters from Revenue will be hitting the floor in many hallways. Last night in Graiguecullen, County Laois I spoke to people with take-home pay of €300 a week and some disabled people in dread of this tax. It was wrong in December and is still wrong today. Sinn Féin will table amendments to knock the rough edges off it, but no amount of amendments can change the fundamental fact that this legislation takes no consideration of one's ability to pay and will impose a 4% or 8% interest rate every year on those who cannot pay it.

The Bill also gives powers to the Department of Social Protection to deduct the tax. However, the Minister for Finance did not look to the Department of Social Protection to poverty proof the Bill before its introduction. Such a study would have had regard to the impact of the Bill on people such as those I have referred to, those on low incomes and those who are struggling. Such a study would have determined whether the effects of the family home tax caused people to be deprived of essential items. It would have been identified in a survey and the key issue is that the exercise has not taken place. I urge the Minister to have regard to such a study or at least to do so before commencing the Bill. I appeal to the Minister in this regard and I put the case to him honestly. I challenge the Minister to have the courage and conviction to carry out that exercise.

Shockingly, this Bill, which amends the property tax, contains no waivers or exemptions and no way out. Those people I referred to are trapped. The millionaire will pay the same as the pauper and the lone parent will pay the same as the millionaire. I strongly advocate exemptions or waivers. The waivers should include people in low-income households, including those on jobseeker's allowance; one-parent families; those on supplementary welfare allowance and family income supplement, which is the lowest social welfare payment in the State at €186 - not even these people are exempt; those on farm assist; old age pensioners and recipients of occupational pensions; and people on the invalidity pension, those on disability allowance and benefit and blind people. None of these groups is exempt. No one is exempt but at a minimum we should exempt these people.

The Minister has gone for the soft option and imposed a tax on homes rather than wealth. He is putting the tax on local authority houses. A person living in such a house does not own it. The Minister is putting a tax on something that does not belong to the person concerned. That is the key point. People in negative equity do not have property; they have a millstone around their necks. By its nature this tax will hurt people on low incomes. I imagine the Minister has met such people. I have met people in recent months who are in a state of trepidation because of the tax.

Last December we gave the Minister choices. We set out alternative proposals for the budget in a document whose theme was making the right choices. We spelt out exactly how the books could be balanced without implementing this home tax. We outlined new tax measures to raise €2.7 billion that would not have affected low and middle-income groups, including a third rate of tax at 48% only on portions of income greater than €100,000. We set out proposals for a wealth tax that would exclude working farm land and the family home up to the value of €1 million. Other exemptions were contained in the proposal. We set out measures including standardising all discretionary tax relief, which would have raised substantial funding, and we proposed a tax on betting. Many people might not like that idea but I would rather see a tax on betting than a tax on the family home of people, including, for example, those who I met last night. If the Minister reflected on our proposals he would conclude that they would a be a good deal fairer. We outlined where savings could be made. Our savings would have brought in €1.044 billion. Sinn Féin does not believe that savings cannot be made but they should be done in a sensible way. We outlined savings throughout the health sector and other parts of the public sector, including a recommendation for the replacement of branded drugs with generic substitutes.

The Government is hiding behind the troika in this case and blaming Fianna Fáil. Naturally, it was Fianna Fáil that conceived the idea of this house tax. The Minister, Deputy Noonan, was not in favour of it when he was in opposition, as previous speakers have noted. Now, the Minister maintains it is part of the agreement with the troika. It was part of the agreement involving the previous Government but the current Government got a new and very significant mandate, which goes right around to this part of the Chamber; that is the extent of the Government's mandate. The Government is setting out to deceive the public by suggesting that it must do this because of the troika. The Government has choices. We recognise some of those choices might not be easy. One cannot pull rabbits out of a hat and I do not intend to pretend as much but there are choices and those choices should be taken.

There is an exemption in section 2 for the disabled. The problem is that the cost of the adaption of a house must be one quarter of the value of the home. Many adaptions have been carried out. I have dealt with cases at constituency level which only cost €4,000 or €5,000. Some works only cost €3,000, for example, those involving the installation of a stair lift. The measure will not get to the people who are affected.

I appeal to the Minister to take into consideration local services, for example, in the county where I live. We pay for all of them already. Refuse collection was privatised in 1985. We pay for it. We pay fire changes and a range of other charges. A range of other services have been completely privatised. That is the difference.

Through this measure the Government will screw low-income households and those who simply cannot pay. I have seen people and the effect this is having on their physical and mental health and it has shaken them. I say as much honestly. This will be evident when the letters come through the letter box. These people know that water charges will come in next year once the local elections are out of the way. The people know what is coming and what is in front of them and it is not fair. I call on the Minister to revisit it.

Deputy Catherine Murphy

I will be sharing time with Deputies Richard Boyd Barrett, Joan Collins and Clare Daly. We would much rather more time but the guillotine is being imposed to allow the Revenue Commissioners to send out tens of thousands of letters to people, most of whom are already prepared for it.

The reason there is no vote today is because the Government does not want to debate the Bill. It is providing time for what it believes to be a necessary evil, otherwise known as the Opposition. At the same time, most of those in the bloated Government are heading out to do constituency clinics and attend local events. As of now, only three slots are to be filled by members of the Government and that says it all. It appears to be a rather cynical exercise to try to conclude before 3.30 p.m. The matter of constituency clinics, to which I adverted, represents the same parish pump politics charge that is singled out for those of us who are Independents. However, we can see that it is clearly taking place on the Government side.

The Bill is intended to amend a Bill that was only enacted before Christmas. This shows that the process was a failure. The prior Bill was shoe-horned into December to have it passed before Christmas for one reason only: to get the backbenchers home for Christmas and ensure that they could not be got to during the Christmas recess. That is an abuse of process.

Another abuse of process was the general election, when people clearly believed they were given another option in Fine Gael. That party stated in its manifesto that it did not intend to do this. Apart from resistance to the tax on the family home, which does not, of itself, produce any wealth, my key concerns with this tax include ability to pay, fairness and what the tax is to be used for. I believe the tax fails at all levels. The Fine Gael manifesto acknowledged all three of these concerns, highlighting people who were asset rich and income poor, including pensioners. The document highlighted the negative equity generation, which has paid vast amounts of stamp duty. Many of those people only own a debt at this stage. The document highlighted the need to reform local government and remove wastage. All of this is set out in the Fine Gael manifesto.

What are we being asked to pay for? The motor tax fund from 1997 was ring-fenced and used as a key component of the local government fund. We now have a shortfall in the local government fund. Why? The reason is that between 2009 and 2013 some €543 million has been withdrawn from the fund. The property tax is expected to take in at best €500 million. That knocks on the head any chance of any additional services being provided.

When opening the debate on the Motor Vehicles (Duties and Licences) Bill 2013, the Minister for the Environment, Community and Local Government suggested that in 2012 some €46.5 million of motor tax income was transferred from the local government fund to the Exchequer and that this year an amount of up to €150 million would be similarly transferred. He further suggested these were necessary measures towards the reduction of the national debt. Let us be clear: this Bill is not about a property tax. That is the label put on the measure but in fact it is a tax for funding the national debt. Giving the impression that the tax will provide extra services, including parks maintenance, leisure services and street cleaning, is simply nonsense.

Other countries impose property taxes. I have friends and family members who live in other countries. I discussed with a friend who lives in France how property taxes are levied in that country. He told me that the imposition is worth it for the return it offers. It funds summer events for his children, child and elderly care, a local police service, ongoing urban improvements and leisure facilities and services. This Government is quick to point to other countries but the services I have just described are either not provided in this country or people pay for them separately. It is fair to ask what people will receive in return for this tax.

One reason the tax will be hated is because it is being used to fund the national debt. No developed country that is serious about proper local government should impose a tax in this way. Local representatives should vote for local taxation measures and the money should stay in the locality. We have it backwards. The current system of distributing the local government fund is already wildly unfair but the Minister is determined to retain 35% of the property tax as an equalisation fund to be distributed as he sees fit.

The historical development of local government in this country was based on control and centralisation. It is a reflection of the 19th century. If we were to build the best attributes of Irish people into the local government system we would end up with a different type of politics. However, reforms have been piecemeal and timid at best.

I will have to leave out a lot of what I wanted to say because of time, which I fear is not going to be available later because the Government is not filling slots. I have tabled a number of amendments on the issue of pyrite. The Minister would not buy a house in an estate in which pyrite was proven to exist. Such houses should be excluded from this tax on the same basis as unfinished estates. It is nonsense that householders will be required to pay €1,000 to prove they have a pyrite problem in order to secure reductions of €300 or €400. In regard to people with disabilities, I do not think he realises that the fund is operated differently in the various local authority areas. Some means test for it and others do not. An individual in County Kildare who is bed ridden will not get a grant if somebody is looking after him or her in the house. It is nonsense to include this type of proviso. These details should have been teased out so we could see the differences among local authorities. I would have liked to make some positive suggestions on how we might reform local authorities but I will leave my remarks for another day because I do not want to use my colleagues' time.

Deputy Richard Boyd Barrett

I join Deputy Catherine Murphy in protesting in the strongest possible terms at the imposition of the guillotine. Many of us would like to speak for a considerably longer time because there is a lot in this Bill. The Tánaiste put on a display of political cynicism when we was questioned on this matter yesterday. It beggared belief that Government Deputies were chortling in their seats about playing the PR spin game and refusing to acknowledge the serious protest we had made to the imposition of the guillotine. Despite the Government's grandiose claims about democratic revolution, transparency and a new kind of politics, it has established a clear pattern whereby a Bill is guillotined if it is controversial or looks set to face serious opposition but non-controversial legislation is allowed to run for days. That is the game it is playing. I do not know why Government Members are not ashamed about that level of manipulation. It is scandalous. It is bad enough that the country is in its present hole or that the Government plans to increase the people's suffering by imposing this charge on hundreds of thousands of ordinary householders but it is absolutely shameful that it refuses to allow proper debate and scrutiny of these measures.

Government Members have honed their skills in media manipulation and PR very well. It is a pity that we do not live in the world of "The Matrix", where perception is reality because if we lived in the virtual reality bubble in which this Government appears to reside - the media virtual reality bubble where if one says something often enough it becomes reality - it would be great. However, when we walk outside of the bubble of this House and go to the estates, towns and villages to talk to ordinary people, they can see through all this virtual reality and media spin and manipulation because they have to face the cruel reality of having no jobs and their incomes being slashed. They do not know how they can manage their bills or pay their mortgages. They are terrified for the future of their children and are at their wits' end about their capacity to survive. It was heart wrenching to hear stories of ordinary workers in IBRC - not the management - who spent their lives paying taxes only to discover via the television that their jobs were gone and they would be walking away, in their 50s or 60s, after years of employment with €13,000 as a pay off. They do not know how they are going to pay their mortgages. One story we heard yesterday involved a man in his 50s who never depended on social welfare for a day in his life and does not know whether he can pay his mortgage. That is the appalling reality.

The Government now wants to impose a charge of hundreds of euro per year on top of that reality. People simply cannot pay it and all the spin and manipulation of the democratic process will not mask that reality nor will it prevent the people from feeling rage, anger and despair. It is time the Government got rid of the myopia it seems to suffer and started to face the reality that it is asking hundreds of thousands of people to do something that is not possible. They cannot pay. Approximately 200,000 children live in poverty. Their parents and families also suffer poverty. How does the Minister expect them to pay? We have asked that question time and again. How does he expect people who cannot pay their mortgages to pay this new tax? I laugh when I hear him say this is a better alternative to increased income taxes because the latter would be a tax on jobs. It is as if there are two different realities. There is one reality in which people get their pay packets and another reality in the mysterious source of money that can be found in the back gardens of their houses. Money trees do not grow in the back of people's homes. Where are they supposed to get the money?

This will have a depressing strangulation effect on the rest of the economy. Does he not see what he is doing? Every euro he takes out of the pockets of people who cannot pay their bills is another nail in the coffin for the domestic economy. The deferrals are a joke. Those who are in insolvency arrangements may get deferrals. They are strangled with debts and forced into these arrangements because of the activities of banks but as soon as they get out of them they will have accumulated further debt through the property tax, thereby offering a vista of misery for years to come for hundreds of thousands of families.

We continually remind the Minister of the alternative, but he refuses to debate it seriously, just as he does not want this debate. Why instead can we not tax those sectors of society the Minister refuses to touch? Unbelievably, I got an answer from the Department today to a question I put regarding corporation tax, stating it could not calculate the effective corporation tax rate. When I ask about the effective income tax rate, the Minister gives the answer. It is a simple calculation of the gross income, tax paid and the percentage of the latter as a proportion of the former. That is the effective tax rate. However, when the same question is asked about the corporation tax rate for the corporations he refuses to touch, which could be hit for further taxes to save the suffering of ordinary people, he says sorry but it cannot be calculated. That is rubbish. It is clear, using the same methodology as for calculating the income tax rate, the effective corporation tax rate in this country is 6.2%, half of what the Minister claims it is.

The Minister should be fair. He must be fair to the economy and to those who are suffering. He should tell the truth, allow for real debate and begin to consider taxing those who can afford to pay rather than those who are being crippled.

Deputy Joan Collins

I too strongly oppose the guillotine on this debate. We must look at the state of the country and see it for what it is. For decades, the policy of successive Governments has been to encourage people to get on the mortgage ladder. In 1989, I was renting a two-bedroomed house in Kilmainham at a cost of approximately £980 a month. An opportunity then arose to buy a house in Inchicore for £31,000, with a mortgage cost of £1,100 per month. When mortgage interest relief was applied to that, the cost reduced, making it worth a person's while to consider buying a home. Not only did Governments in those decades introduce tax relief incentives, in the 1990s they also introduced tax reliefs for buying properties in the city or apartments, all in an effort to encourage people to buy their own homes and buy into property. They did this rather than encourage a strong and healthy rental system where tenants and landlords would have rights and proper accommodation would be provided.

We are all aware of the horrible state of some private rental stock in this city, but we now see a change with local authority inspections. We have seen apartments on the South Circular Road and elsewhere which were in a terrible state, dreary bed-sits full of mould, terrible toilets and net curtains that were falling apart. This was the type of choice available for years in the city. This was an incentive for people to get their own homes and that was actively encouraged by Governments.

We also had a situation where Government policy in the 1970s and 1980s actively encouraged people who were renting local authority housing to buy their homes. When they bought those homes, these people expected they would be able to continue working and paying their mortgage and that when they reached retirement they would know what pension they would have and would be able to live on those means. However, now the Minister is slapping a property tax on those people. He is slapping a home tax on them and ignoring their expectations. The Government reminds us often enough that high earners on super pensions have expected earnings. We had an expectancy that we would be able to retire and have the comfort of our own homes. We had worked out what money we would have. Working class and ordinary people are very careful about managing their finances for their later years. However, now they have been told they will have to pay a home tax of up to €400 per year.

On top of the home tax, they will have to pay a water tax year and probably a broadcasting tax the following year. We are talking about an extra €600 to €800 per year for people in average homes. These are people who can barely get along. Many of them are elderly people who are keeping their children going. They are paying for their children's school books, clothing and food because of the effects of the austerity carried over by the Government from the previous Government. It is the Tweedledum and Tweedledee, Lanigan's Ball, politics of "you step in again, I step out again". We have different parties, but the same policy of continuing the austerity and continuing to hit on people who can ill afford these attacks. Please give people some relief. People say to me they need some sort of leniency along the line to see if they can find their way out of the situation they are in, but the Government does not seem to see the need for that.

Young couples who bought their houses during the boom paid huge stamp duty. As I said earlier, I got a mortgage of £31,000 - I cannot say I bought my home because the mortgage is not paid yet - on my house in Inchicore. Recently, in the madness of the Celtic tiger boom, my house would have sold for €500,000, though not worth that. Ordinary people with young families who wanted to get onto the property ladder, encouraged by successive Governments, would have paid massive stamp duty to buy a house at that price. Now they are being asked to pay this property tax.

I met a girl who went to the bank for a loan for a car four years ago and came out with a mortgage for an apartment. That is the way the market was driven. Once somebody went looking for a loan, one was encouraged to get onto the property ladder. They were told this was their opportunity to get an apartment. The girl I met is now living at home with her parents and renting out her apartment because she cannot afford to pay the mortgage. That is the madness of our situation. Yet, the Minister says these people must pay a property or family home tax.

This tax is to be applied right across the board, with just a few exceptions that will only have a minimal impact and will not help the people who need it. One out of every four mortgaged homes are in distress, with mortgages unpaid for over 90 days. Many people are on interest-only repayments and are in debt to their homes. However, these people are being told they must pay this family home tax. The Minister must meet people every day of the week who are in this situation, who cannot see their way to paying this family home tax. This Government and the previous Government have taken €27 billion out of the economy. They now plan to take €1 billion from the pockets of public sector workers by railroading them into accepting the proposed cuts. Some 8% of a cut will affect those on incomes under €65,000, but only 7.9% for those earning over €150,000. Where is the fairness in that? These proposals are absolute madness. The Government's cuts affect the same people all the time and it is taking another €1 billion out of the economy.

Looking at the figures on sales taxes, over one third of the price of a bottle of wine goes straight to the taxman. Perhaps the Tánaiste, Deputy Gilmore, is doing the taxpayers a favour buying €79,000 worth of bottles of wine. Some of that is going back to taxpayers. Latest retail sales figures reveal that there was yet another decline in consumer spending in January. People face fierce taxes in the context of spending and this makes austerity even harder for them. The Minister should review what he is doing. It is lunacy and will stress people out.

Deputy Clare Daly

As others have said, the ink is hardly dry on the Minister's original legislation and we are back already with a list of amendments that will be wholly inadequate to undo the damage and destruction that will be caused by this tax. This is a forerunner of the fiasco this legislation represents. This proposal was badly thought out, was rushed through and is part of a process that is foisting further taxation onto the shoulders of people who can ill afford it.

The Bill before us is clearly an attempt by the Government to give the illusion of limiting the worst excesses of the Act by dealing with the greatest inequities, excluding a few more people and trying to dress it up as dealing with the growing opposition to this tax the length and breadth of the country. There is not a chance of that intention being fulfilled whatsoever.

This tax is already hated. In my opinion, it will represent a turning point in the attitude of ordinary people to the austerity that is being put on their shoulders, not just because they cannot afford it but also because of the economic lunacy it represents. This attempt to take more taxation from the pockets of people who are already stressed will not serve our economy well and will not stimulate it. In fact, it will exacerbate the problems that already exist.

One of the things that really gets people's goat is the incredible contrast between this Government's treatment of ordinary people and its treatment of wealthy people in our society. All of the statistics show that those at the top of society have benefitted over these difficult years, whereas middle and lower income families have been absolutely decimated. This is part of the same process. Home owners are being targeted by this Bill, which is probably the most draconian legislation ever to come before the House. Meanwhile, corporations are bring handled with a light touch. Previous answers given by the Minister have indicated that the effective rate of taxation on corporations is approximately half the rate levied, which is one of the lowest rates in Europe in any case.

The Minister has come up with this home tax to meet the deficit and continue to shackle us to the debts of private banks, which resulted from problems we were never associated with. I will not repeat the points made by others in this regard. The dogs on the street know that a home is not an asset. It is not a source of wealth. In many instances, it is the biggest headache that people have. To be honest, the idea of putting another tax on it is not the brightest one. Having been fortunate enough to have attended many meetings on this issue, I echo the comments of Deputies who have said this is a matter of huge concern for people around the country. One of the most common points one hears from older citizens, who tend to be to the fore at many of these meetings, is that having spent their whole lives putting a roof over their heads and providing for their families, they would rather do time than be taxed for the right to live in their homes or hand them over to their children and grandchildren.

One of the amendments to this Bill that the Minister intends to introduce will seek to lessen the valuation of local authority houses. Next week, he will be asked to consider an amendment that will propose the exclusion from this legislation of such properties. He exposed the lie that this has anything to do with local services when he decided to levy that amount of money on council properties. We know that local authorities do not have the money to pay these charges and that they will seek to pass them on to their tenants. Even if they are set at the lower level, which is only being done for the first three years in any case, that will not negate the difficulty in this regard. Once these properties are included in the legislation, the intention will be to increase the charges applying to them in the future. This will do nothing other than to exacerbate the problems for local authorities and their tenants, all of whom are being exposed to excess and increasing rents at present.

I do not have enough time today to develop all the issues that arise in the context of this Bill, but I will do so next week. If the Minister re-examines the argument for a pyrite exemption, he might change his mind before Tuesday. I ask him to consider the matter in advance of the long debate we will have then. The Government lauded itself on its establishment of the pyrite panel, which received many submissions and was the subject of much involvement. The resounding conclusion reached by the panel was that homes affected by pyrite should be exempt from the property tax. The Minister for the Environment, Community and Local Government said that and the Minister for Finance said he would take account of it. The approach being proposed by the Minister is an illusion. This exemption does not recognise or take account of the difficulties faced by those who own homes affected by pyrite. If the Minister is genuine in his intention to protect such homes, he should heed our call and accept our amendments. He promised something in that regard.

The Minister is talking about allowing the Minister for the Environment, Community and Local Government to draft guidelines to deal with homes that have significant levels of pyrite damage. Who will measure that? Who will pay for it? I suggest that the liability is being returned to the home owner. Many homes that have tested positive for pyrite are currently displaying very little damage. That damage can appear over time. Work done on adjoining properties can affect houses. What is the story? The guidelines suggest that reference will be made to the new standard set by the National Standards Authority of Ireland. Significant levels of pyritic heave have already been indicated in tests that have been done on behalf of many home owners. Will they get exemptions on the basis of the tests they have already paid for? I suppose all of these points demonstrate that the onus is being placed on the home owner, which is completely unnecessary.

The only fair way to proceed is to make a simple amendment to the Bill to provide that estates affected by pyrite are included as unfinished estates and are therefore exempt as of right. It does not matter if one's house is not currently displaying signs of damage - if one is in an estate that has unremediated pyrite problems, one's property is valueless. The only way to deal with that is to exclude such estates from the scope of this legislation. We are proposing a simple way of doing that, which involves the inclusion of all of these estates in the list that the Minister has to revise anyway. The amount of revenue that will be forfeited if this is done is quite negligible in the overall scale of things. I think the Minister can concede this point when we extend the debate next week.

I will make a final point before I conclude. When I attend meetings, I often hear people saying they do not know how much more the Irish can take and asking why we are not more like the Greeks or the French. If the Government succeeds in putting this draconian legislation on the Statute Book, and if in implementing it the State attempts to put its paw into the pay and social welfare packets of home owners, we will see Irish people start to become more like the Greeks and the French. They simply will not be able to take it any more.

Deputy Olivia Mitchell

I would like to share time with Deputy Donohoe.

Acting Chairman (Deputy Terence Flanagan)

Is that agreed? Agreed.

Deputy Olivia Mitchell

I begin by reiterating my deep unhappiness with the method of calculation that is to be used to determine liability for the property tax. I do not think that will come as a surprise to anybody, not least the Minister. Like many of my colleagues in urban Ireland, I believe the proposed regime is unfair to Dubliners and, to a lesser extent, Cork dwellers and those who live in other cities. It is an unsustainable tax. It cannot survive the test of time in its current form. I regret that because I support the concept of a property tax. If we had introduced such a tax long ago, we would not have had the property boom - or at least we would not have had it to the same extent - and we would not be in the state we are in now. It is patently unjust that a person in rural Ireland could pay as little as one ninth of what a Dublin person with a similar income and a similar home will pay. While that would be an extreme case, it is certainly true that a person in a rural area will only ever have to pay a fraction of what a person in Dublin in similar circumstances, with the same size of home and the same income, will have to pay. The Minister is aware that an essential attribute of a tax is that it should be fair. This is just not fair.

The argument that better services are available in Dublin is absolutely true, but it is irrelevant because such services are paid for from general taxation. We are more than willing to pay for them. The taxes raised in Dublin pay for such services. Any surplus that exists is used to subvent services in rural Ireland, which is as it should be given that the whole purpose of general taxation is to distribute income. My essential point is that the distribution of income is not the purpose of a local tax. The argument that a house in Dublin is a more valuable asset is also true, but it is certainly not a justification for charging more tax. People in Dublin have a more valuable asset because they paid more for it. The important point is that they will continue to pay more for it over the course of their 30-year or 40-year mortgages. As a consequence, they will have less disposable income than their rural counterparts over that period of time. I should also mention that many of those who bought in the last 15 or 20 years made very substantial stamp duty payments. While I realise that the tax yield that is expected from this measure in 2013 is in the budget and cannot be changed, I want to lay down a marker by asking the Minister to consider amending the way it will work and will be calculated in 2014.

What I want to talk about are the specific measures in the Bill, which I largely welcome. In particular, I thank the Minister for responding comprehensively to my representations in respect of homes specially adapted for disabled persons, regardless of whether they were provided by their families or benefactors or as a result of court awards. As State provision becomes increasingly difficult for families of severely disabled persons to obtain, they have been forced to become more innovative in finding solutions themselves, usually from their own resources, to the long-term residential needs of their sons, daughters, sisters and brothers. When families have gone to huge expense to provide homes, it is unthinkable that they would also be asked to provide an annual property tax. The Minister has recognised that in giving a complete exemption, for which I thank him. I know the families will be equally grateful to him.

A complete exemption is granted in these cases but not in cases in which existing homes are adapted to accommodate a disabled person. Deputy Pearse Doherty highlighted the problem with this particular case. I am not sure what the thinking behind it is and I ask the Minister to clarify and think again about it. The explanation is that the reduction is limited to the lesser of two values: the chargeable value attributable to the adaptation work carried out on the property, and the maximum grant value under the relevant local authority scheme. That would indicate that the greater the grant, the greater one's relief. That would make sense if the grant scheme was related in any way to the actual cost of the adaptation. Deputy Doherty is right in saying that different schemes applied in different local authorities. In some years, local authorities had no money and no schemes so people built with no grant. Sometimes the grants were means-tested and sometimes they were not. It was a moving goalpost as far as the grant scheme was concerned. This does not seem to be a good basis for deciding the relief now. Incidentally, I should declare an interest, as I received a grant many years ago. I have received endless queries, which is why I would like this clarified.

Another issue that arises in respect of this relief is that it does not apply to any adaptations done prior to 2001. This is surprising, because the grants after 2001 were extremely generous. As was the case with all problems in the years following 2001, money was thrown at it. I remember that back in the 1980s and 1990s the maximum grant from Dublin County Council was £6,000. Families took out huge additional mortgages to accommodate disabled children and family members. Many of those have since died, for obvious reasons, but many of them are still alive and living at home. It does not seem fair that they should be excluded because there may have been an increase in the value of the property as a result of that adaptation. I am of the view that sometimes those adaptations actually reduce the value of the house. I ask the Minister to consider whether the grant value has any relevance to the increase in value attributable to the adaptation.

I wonder about the decision to charge the tax to owners of rented accommodation, including local authorities as owners. I realise that from an administrative perspective it is probably cleaner and easier, but there is much to be said for everybody paying something. In many countries, this is dealt with through a habitation tax or a mixture of that and a property tax. It would avoid huge resentment that will exist not only in council estates between renters and those who have bought their homes but in private estates where councils have bought houses or where housing associations are renting out properties. We will have situations in which one person pays a substantial sum in property tax while others pay nothing at all. I recognise that local authorities will try to pass on some of the cost but they will not be able to pass on all of it, so the cost falls back on the people who are paying.

This is not an area that gets much sympathy, but it is another whammy for owners who rent out properties. They may be able to pass on some of the cost but generally they are regarded as fair game for any tax. They are not treated for tax purposes in a similar fashion to all other businesses. We must understand that we need a vibrant rental sector, even for economic reasons, because we need to encourage mobility for workers. We will always have people who will not be able to buy and will need to rent and people whom it suits to rent. If we regarded renting as a normal business rather than something unsavoury and distasteful, we might lose that obsession with owning property and avoid a future property boom.

Unlike others, I think the snitcher's clause is a good idea, as is enforcement. All of the measures that have been introduced are highly desirable. Nothing incenses people more than some people getting away with not paying while those who are tax-compliant pay for them. I would like to change this law but I do not believe in breaking the law. As long as it is the law, it must be observed. I agree with the snitcher's clause. It is in people's interests, if they are buying a house, not to compound an error or deceit perpetrated by the pervious owner. Can the Minister tell me whether the reverse will also apply? If somebody has erroneously overpaid a tax, will it be refunded? When the property or a similar property is sold, it seems only fair that it should be repaid. It is inconceivable that there will not be cases in which people find they have overpaid and there will be a long queue of people going to the courts over the years unless it is made clear that it will be repaid. I suggest that now is the time to legislate for that. I have much more to say but I might keep it for another day.

Notice taken that 20 Members were not present; House counted and 20 Members being present,

Deputy Paschal Donohoe

I wish to focus on a particular topic: the impact of this proposed tax on homes that have been flooded and homes that bear the risk of flooding in the future. There has been much focus on the issue of market valuation and the challenges it poses, particularly in urban areas. It is vital that the new system include future flood risk when assessing market valuations of properties. If one home in a street has been flooded but its neighbours have not been flooded, it is obvious that the flooded home will have a lower market valuation than the homes that have not been flooded. It is essential that when home owners receive their proposed market valuations and bills for payment, they are allowed a reduction in recognition of the fact that when they sell their homes the values will be lower due to the risk of flooding. I have already raised this issue with the chairman of the Revenue Commissioners at a meeting of the Committee of Public Accounts. She decided it was an important issue which should be included.

I wish to emphasise two points in particular. This decision should be proactively communicated to home owners as part of the publicity campaign to be undertaken by the Revenue Commissioners. The chairman of the Revenue Commissioners confirmed this will be done. Many people, on receiving the market valuation, will be inclined to agree with the valuation. They may not recognise that flooding reduces the value of a property. It should be made clear to home owners that they may keep proof of the legitimate reasons for a reduction in the market valuation. The clearest example is that if a home owner is unable to get insurance for the property then the market value is reduced. It must also mean that the tax liability of the home is reduced accordingly. I say this in the knowledge that this is the case for some homes in my constituency. It is probably the same for Deputy Humphreys's constituency, as it is also subject to flooding. Some homes in my constituency have not been flooded in the past but because they are located beside areas that have been flooded, their owners are unable to get home insurance. It is very important that home owners understand that risk of future flooding or inability to get insurance are legitimate reasons for a reduction in the proposed market valuation. They must ensure they are charged the lowest tax possible. While many in urban areas are very conscious of the costs of a market valuation approach, this market valuation must be consistent and coherent. If, due to no fault of their owners, homes are at risk of flooding and have a lower market valuation, this must be accepted as a clear reason for a reduction in the tax liability attached to the property. I raised this issue with the chairman of the Revenue Commissioners at a meeting of the Committee of Public Accounts. She agreed with my explanation of what market valuation could mean. Given that this affects so many homes across the country, I would be grateful if the Minister could make reference to this in his concluding remarks.

If local authorities understand that there will be a reduction in revenue due to flood risk, they will give a higher priority to ensuring that homes are free from the risk of flooding. They will also need to deal with the problem of local authority properties being uninsured.

Deputy Olivia Mitchell spoke about the revenue-raising measures in this Bill. There is a need to provide clarification to taxpayers. The Government has committed to using 64% of all revenue raised by the tax to fund local authorities such as county and city councils, who will decide how to spend it locally. It is crucial that the Government make this clear and that it be a requirement. I would go so far as to say it should be included in the legislation. Many of the home owners and people I represent in Dublin Central do not want to pay this tax. It represents further hardship for them. We need to be able to demonstrate to them that the money raised will be spent locally on housing projects and public services that make communities as safe as possible. The balance of that money should be invested in the area in which it was raised. For example, tax raised in the Dublin area should be invested in the Dublin area. If other areas outside Dublin find that the tax rate charged is not sufficient to meet the needs of the people then the rate should be increased. The tax rate that applies to counties should be equivalent to the service levels that the people need. In the near future, local authorities will have the ability to set their own tax rates within a certain corridor. I want that provision to be used and the rates to be changed according to the needs of each county. People in Dublin paying this tax will need to see the benefits at local level. It should be a legal requirement that the money be invested in the local authority area from which it was raised.

I refer to section 6 of the Bill and section 7(3) of the preceding Bill, which introduced the property tax. Section 6 provides for an exemption for housing provided for people with disabilities or with a high level of need.

I was involved in discussions with a number of social housing organisations earlier today and discovered that one of the matters in respect of which they required clarification was how the Revenue Commissioners were going to implement the provisions of the Bill. Will Revenue confirm that the housing stock these organisations supply, in other words, that which is not provided by local authorities and which meets the needs of people who would otherwise not be able to obtain housing, is catered for under section 6? The organisations in question require clarity in the context of the money the are going to need in the future. This is extremely important, particularly as they will be seeking to raise their own funding in the future. Their ability to do so will be greatly reduced if there is no clarity on how section 6 applies to them.

Acting Chairman (Deputy Terence Flanagan)

The next speaker is Deputy Dara Calleary who is sharing time with Deputy Michael Moynihan.

Deputy Dara Calleary

I welcome the opportunity to contribute to the debate on the Bill. I wish to pick up where Deputy Paschal Donohoe left off by stating it is hugely important that there be clarity in respect of the social housing sector. This matter reflects the difficulty regarding the manner in which Second Stage is being rammed through today. The clarity being sought in respect of the relevant sections is going to have to be provided within a matter of 90 minutes or so on Committee Stage which is to be taken on Tuesday next. The really important issues such as this and that which relates to clarifying the exemptions relating to properties bought for or adapted to meet the needs of people with permanent disabilities must be worked out in intimate detail. When responsibility for collecting the property tax is passed to the Revenue Commissioners, they will implement the provisions of the Bill to the letter. As public representatives, we must be in a position to understand the import of these provisions. However, we are not being given the opportunity to achieve such an understanding.

The Finance (Local Property Tax) (Amendment) Bill 2013 is being introduced six weeks after the introduction of the original legislation. The Government should have learned a lesson from what had happened on the first occasion, namely, that ramming legislation through the House and getting the debate on it, particularly on Committee Stage when Deputies have an opportunity to discuss matters in detail, over and done with as quickly as possible is not the way to proceed. Will further amending legislation relating to the local property tax be introduced in April or May, when many of the issues being raised by Deputies become apparent during the implementation phase? As stated yesterday, when we cannot obtain answers to our very legitimate questions and concerns, what we are engaged in today is essentially a charade.

What is proposed in the Bill - the process relating to which will commence when people begin to receive letters from Revenue in the coming weeks - is going to take €250 million out of the domestic economy this year. Next year it will remove a further €500 million. This is happening at a time when the CSO has provided further indications of the serious difficulties being experienced within the domestic economy. The Government is talking up the export economy which is doing incredibly well. Exports are powering ahead and all of the multinationals that have invested here are doing well. At the same time, however, the domestic economy is either not growing or, in certain areas, beginning to fall back. If we continue to remove money from that economy and reduce the ability of people to spend within it, it will not grow. As a result, we will be faced with further job losses rather than employment growth.

Retail figures for January indicate that department store sales were down by 15%, bar sales by 8.1% and motor sales by 3.6%. January is one of the most important months of the year for the motor industry, in which approximately 50,000 people throughout the country are employed, and sales are down. In fact, the sector is haemorrhaging sales. Even in an era when there is genuine choice, bar sales are also down. This is all because people do not have money. Where are they going to find the money to pay property tax this year? Even if they are only going to be obliged to pay half the tax this year because it is being introduced by degrees, they will still not be able to come up with the money.

Deputies have all had people in their clinics about this matter in the past six months. This was particularly the case in recent weeks when the amounts they would be obliged to pay began to become apparent. There are no exemptions for people who are struggling, whose lives have been transformed by the economic crisis and who may have had the ability to pay this tax four or five years ago. In this regard, I refer to the case of a woman I met recently at my clinic. She and her husband had the capability to build and sustain a large house in a rural area. As a result of a tragic accident, however, her husband no longer works and is receipt of disability pension at the age of 35 years. This is a genuine case. The woman in question is not in a position to work and cannot find a job in any event. The house is unfinished - it is not in an unfinished estate - and the couple do not have access to the services which many take for granted. They will be obliged to pay €500 or €600 in property tax this year and a larger amount next year. They do not have that kind of money and neither do the 50,000 people whose mortgages on their family homes are in arrears. However, we are going to proceed - as if we were in some kind of bubble - because there is a belief abroad that people can and will pay property tax. It is very clear that they cannot do so because they just do not have the money. It is for the reasons I have outlined that Fianna Fáil illustrated the other ways in which the money might be raised. I refer, for example, to the introduction of consumption taxes whereby people could pay for their overall consumption through the payment of additional tax. However, the Government is determined to proceed on its current route. The position is going to become serious in the coming weeks when people grasp the implications of the tax.

I made a point 18 months ago - previous speakers alluded to it - that people were going to receive not so much as an invoice as an instruction from the Revenue Commissioners in the next few weeks and that they would genuinely inquire as to what they were going to receive in return for paying property tax. Deputy Paschal Donohoe pulled on his county jersey and stated what was raised in Dublin should stay in Dublin. That is good medicine for the troops. We must consider, however, what people living in rural areas are going to receive in exchange for paying the tax. These individuals are obliged to pay in order to have their waste collected. The troika has stated this is a European-wide model and that everyone throughout the European UNion pays property tax. However, when people in other member states pay their property tax, litter is removed from their areas, street lights are maintained and a range of local government services provided in return. What will people receive here?

Deputy Fergus O'Dowd

They get Fianna Fáil county councils.

Deputy Dara Calleary

That is not the case. The Minister of State should be serious. As a result of the Government's policies, people are going to be obliged to pay for water and litter removal.

Deputy Fergus O'Dowd

Fianna Fáil brought the troika into the country.

Deputy Dara Calleary

In rural areas street lights are not provided and there is a lack of decent roads. Citizens want to be shown what they will receive in return for paying the tax. When the household charge was introduced in November 2011, I informed the Minister for the Environment, Community and Local Government that it would be courteous and relevant if people were shown what they are going to receive in the context of development, etc. in return for payment.

It is welcome that while the Government is proceeding with the imposition of this tax, it is trying to make it easier for people to pay. In that context, I welcome the involvement of An Post on this occasion. However, people want to know what they will receive in return. Given that they will be paying between a couple of hundred euro and, in some cases, a few thousand, the very least the Government can do is get its pitch together and indicate that the money will be spent on local development, the provision of local services, etc. They do not want to be informed that it will be used to pay for reams of administration. Any business which received an invoice for the amount of money to which I refer would reasonably want to be provided with a schedule of the services or products being provided in return and that should be the position in this instance.

So many opportunities have been lost in the context of the Bill before the House. Given the way it is being driven through, perhaps the position could be examined in the amending legislation which will inevitably follow. Deputy Michael McGrath referred to the exemption relating to pyrite and the fact that various categories of houses would be treated differently. He also referred to the fact that houses in estates affected by pyrite were impossible to sell but that only specific houses in these estates would be exempt. There is an issue in this regard.

As stated, there is a need to clarify the position on properties used by charitable bodies and those bought for or adapted to meet the needs of those with permanent disabilities. I received a couple of such queries and, as always, Revenue was extremely helpful in providing information. We are all aware of individuals of advanced years who have obtained grants in order to adapt their houses. They can no longer use large parts of their homes as a result of infirmity. Will they be exempt from the tax? In certain instances, court awards have had to be made in respect of some of individuals obliged to make substantial alternations to their houses. I welcome that fact. However, I wish to have it clarified whether people whose disabilities are due to age or infirmity will be exempt.

It is incredibly difficult for people to place an actual value on their properties.

For example, a house was sold for €80,000 in an estate in County Mayo through the standard sales procedure of an auctioneer etc. The same type of house four doors from that property was sold in January by a bank for €40,000. How can we value the band for that house when that is happening, and the property register will show that? Are the houses between those two houses worth €40,000 or €80,000?

Regarding the number of distressed sales, another Allsop sale is taking place in the Shelbourne Hotel today; one cannot get near the hotel. Those houses are being sold today but how do the people living in those estates value their houses versus the price that will be paid for them at that sale today? That is the difficulty for people who will try to make an effort to put a value on their houses. There is nothing in the Bill that tells them the Minister appreciates them engaging with this process or that acknowledges that they are willing to put a formal valuation on their houses to comply with the law, and that he will give them a tax credit for what they will pay an auctioneer to do that. Those are practical measures to assist people in this process because property values are all over the place, so to speak, at the moment. The people who genuinely want to engage in this process will find it very difficult to do so because of the lack of support available to them here.

We have dealt with the points on negative equity and the squeezed middle income earners on whom this tax will be imposed. The mortgage arrears crisis is worsening as days pass. There seems to be some movement in recent days in terms of banks beginning to realise the kind of prices they have, but we must consider that 86,000 residential mortgage accounts are in arrears of more than 90 days, which has increased from 81,000 in June 2012. Collectively, those people owe €15 billion to various banks and institutions, and while there is a slight slowdown, that is a huge amount of money, and we will now add another tranche of debt on to what they must pay. They cannot pay their mortgages, yet we will impose a tax on them based on what might have been once an asset, but which is now a millstone around their necks. This tax is very much a millstone tax for many people who are not in a position to pay the mortgage, not because of any lifestyle choice they have made but because they are not in control of what has happened to them in recent years.

Negative equity is a major issue for many people who are living in houses, the mortgages for which are far greater than the value of the houses. We are putting a tax on negative equity through this measure, which will add to people's concerns about the issue.

There is so much to do, and so much that could have been done in this amendment Bill. There is so much the Minister of State and the Minister, Deputy Noonan, could examine because as this tax rolls out, and as the letters arrive in people's homes, they will get an idea of more problems to come.

As I said at the outset, we are fooling ourselves if we think this is a proper way to deal with legislation, in that the Minister could come back into the House after six weeks with an amendment Bill to a Bill that was rushed through the House in nine hours. Also, we have genuine concerns and issues we are trying to tease out, yet this legislation will be rammed through Committee Stage in this House in 90 minutes next Tuesday. The Minister of State is long enough a Member of the House to know that Committee Stage is where we can tease out these issues and come up with answers. We cannot give answers to the social housing groups, the charitable bodies and the various groups who have concerns around that, and I suspect we may not be able to do so next Tuesday either.

Deputy Michael Moynihan

I thank Deputy Calleary for allowing me five minutes to contribute to the debate. I want to reflect on the major concerns among people about this Bill in terms of ability to pay.

A number of issues arise, the first of which is that every house that goes through a sale or transfer transaction must have an energy efficiency rating certificate. Will something have to be done about that in the Bill because the majority of houses on which tax will have to be paid will not be have that certificate? That must be examined because if the Minister is saying, on the one hand, that such a certificate is necessary for a transaction, how can he say the house is liable for a property tax on the other hand? That issue must be teased out.

Also, many elderly people living on their own are talking about making wills to bequeath their properties. It is not only elderly people who are considering that. People in the full of their health are also making wills, but their concern is about the value they put on the house. They put a particular valuation on the house but when the estate goes through probate subsequently, will there be another liability on the estate because of calculations they believed were correct at the time? The issue was raised in regard to Dublin about which many Members spoke.

How can a value be put on a house that is tied to a business, be it a small business or a farm? If a house that is situated in a cul de sac and which is tied into a number of other properties were put up for sale, there probably would not be any sale value in it. How would the Revenue put a value on such a property? These are the issues of major concern to members of the public in terms of their ability to pay.

The biggest problem is that there is a group of people in negative equity, an issue which has been discussed at length in the House. A number of people are very far behind in their mortgage payments. They have furnished records of their personal finances to their banks. They have engaged financial consultants or MABS with a view to parking loans and making sure that the roof is kept over their heads. Irrespective of what is being said, solicitors to whom I have spoken in the past week or two about individual cases say the reality is that the banks are not engaging in respect of specific queries or serious hardship cases. I could name the cases I have in regard to banks. In the past fortnight I have been trying to make contact, electronically, by telephone and in writing, with one of the banks, and it has failed to come back to me. The person who has the distressed loan is in an extremely distressed state. Irrespective of the value of the house or of any issue that will come down the line, I cannot understand how a property tax can be imposed on that person, who built a house but who is now on €188 a week, with no other income. That person simply does not have the money for the basic requirements - food, heating and so forth.

We are debating this Bill again. On the issue of social housing and communities that have developed housing projects - what would be known in the communities as the sheltered housing associations - where do they stand in regard to the advice their tenants are getting, which is conflicting? We have not brought clarity to those issues.

To recap, I cannot understand how the property tax can be imposed in respect of houses that do not have an energy rating certificate. I cannot understand how it can be imposed on elderly people who are making decisions on the transfer of property because the valuation they might put on their houses now may change in the future when it is processed through the system. Where will they end up? We thought there would be clarity in regard to social housing. We assume there will be clarity on that issue on Committee Stage; it is something that must be examined because the associations are concerned about it. Many of them are national associations but many of the local associations in small communities are wondering where they stand in regard to this property tax.

The bottom line is that people will not be able to pay this tax. Many people are going to their TDs, and not just to Members on this side of the House, seeking advice and help in regard to engaging with banks on facilities for loans and so on.

They are in a very distressed state. The bottom line is that the money is not there. In a full year one is talking about €500 million, money that will be taken out of the economy. A credit union survey shows that many people end up with only €50 a month to spend after everything else has been paid, for but many are €50 in debt at the end of the month and must borrow from parents or relatives to try to keep the wolf from the door. People have children going to school and third level and want to do the best for their families. Rural communities, in particular, are faced with a double whammy. They are faced with this tax and the septic tank charge and do not know where it will all end. I appeal to the Minister and the Government to rethink this tax in order that we will not be back here discussing, as my colleague said, an amendment Bill to an amendment Bill.

Deputy Alan Farrell

I thank the Minister of State, Deputy Fergus O'Dowd, for his presence. A number of key issues raised during the debate on the original Bill are being written into this legislation, mainly in regard to exemptions for the most vulnerable, deferrals for low income households and a reduction of rates for local authorities. I welcome these as improvements to the original Bill introduced last year.

As many Members will know, since the introduction of the household charge, with the late Shane McEntee, I have campaigned to have homes affected by pyrite which are without question unfinished owing to the remediation works that will inevitably have to take place included in the unfinished category and granted an exemption from the local property tax. I was very much looking forward to welcoming this Bill in respect of an exemption from property tax for properties affected by pyrite. I accept that it is not possible to grant blanket exemptions for properties where the presence of this material has not been proved, but on reading the legislation and taking in its detail, with many affected homeowners, I cannot but express deep disappointment and annoyance at the extent of this exemption. The bar has been set far too high. The exemption was a chink of light for those who had been to hell and back - as I said in the House previously, I include myself in this - and found pyritic material in their properties. Details continue to emerge that homes must show category two damage and have National Standards Authority of Ireland certification to qualify for the exemption. There has been a lack of foresight by the Department.

I would like to read a piece of correspondence I received this morning from a constituent, which is one of many. I hope the gentlemen concerned does not mind me doing so, but I will not identify him. He stated:

It won't make a difference which category a house with Pyrite falls into, it doesn't change the fact that it still has pyrite, and therefore cannot be sold ... It cannot be too much to ask that any house that produces a positive test result should be exempt from the property tax until such time as their house is remediated.

That is a sentiment I share. If we take the number of affected homes identified in the pyrite panel report as 12,500 - the average house would be valued at the national average of €300,000 - a total of €3.75 million would be due to be collected from pyrite-affected properties. This is, however, massively overstated, as I am doing it for the purposes of discussion because these properties are valued nowhere near the national average; in fact, some of them are completely valueless or have a residual value. The worst case scenario for the Revenue Commissioners is a loss of €3.75 million in a full year, or in 2014. As everybody in the House well knows, the target is €500 million in 2014. Therefore, it is a drop in the ocean and the Minister needs to rethink the approach being taken.

The Bill has disqualified home owners who have paid for testing and have scientific proof that their property contains pyrite - proof which up to this point has been accepted in higher fora than the Dáil, that is, the courts. What about those who have had their homes tested and there are visible signs but are in the category one stage as identified by the National Standards Authority of Ireland? How can we possibly tell them that their properties are not included? What about people who have covered up unsightly cracks in their properties by painting, plastering or wallpapering? Should they be punished for being house-proud because that is what the standard to which we are being asked to adhere does? In many cases, these family homes were bought at the peak of the boom and their owners have large mortgages. They have been abandoned by the entire industry. No one took responsibility for this issue until the Minister for the Environment, Community and Local Government commissioned the pyrite report and took various steps to deal with it. The property tax exemption was a chance for us to give recognition and support to these homeowners, which would have been the right thing to do. Last December we committed to an exemption would be granted to homeowners, but we have gone back on that commitment. I do not say that lightly.

I have a number of more positive comments to make on the legislation. The Bill will ensure homes that have been adapted for incapacitated persons will receive an exemption and that homes with a disabled person will pay a reduced rate. I commend the Minister for the sensitivity he has extended, in particular, to those experiencing financial hardship as a result of incapacitation or disability.

I welcome the exemptions for properties owned by various charitable organisations. A common-sense approach is being taken and recognition is being given to the sector that provides extraordinary service at minimum cost to the Exchequer. Properties purchased for charitable use, made possible through donations or Government funding, are used by citizens when they are most in need. Taxing this accommodation would be a counter-productive exercise and result in a reduction of the valuable service charities provide.

A major concern I raised in the previous debate on the primary legislation was the nature of how the local charge would be applied to local authority houses. While this is a complex issue, we do not want to push local authority tenants over the edge in terms of the rental revenue likely to be levied as a result. It made no sense for local authorities to be liable for a self-funding tax. However, there is a requirement for the burden to be shared across all properties in the State in order to reduce the cost for all other homeowners. The decision to reduce the rate to the minimum charge for all local authority homes is a good resolution for now, which I stress for a number of reasons. It reduces the burden for local authorities in Dublin and city local authorities where the value of properties would have resulted in higher rates than for their rural counterparts. Once again, this would have resulted in money in Dublin or urban areas going into the local government fund to be distributed throughout the State. As someone who represents the largest Dublin constituency, it is fair that Fingal County Council pays proportionately the same rate as its rural equivalents, particularly as this money is going towards a central fund in many cases.

I would like to briefly mention the deferral scheme for home owners. A single person with a household income of €15,000 and a couple with an income of €25,000 can avail of the option to pay at a later date. Families with incomes below €35,000 but above €25,000 can defer half the rate. This measure will give breathing space to families at a time of a temporary reduction in income. It was not set up to be an exemption. It is an appropriate means of reducing a burden at a particular point in time when individuals may be unable to find work or have a restricted family income owing to commitments given in other areas.

Deputy Anthony Lawlor

I wish to raise a number of points. It has been very difficult for those in the general public to get their heads around this Bill. As I have said previously, in 1977 my father was a rate collector and when the rates were removed that year he lost his job. I have always believed that if local authorities are to be sustainable, they must have some way of raising revenue. I have also always believed that people should pay for local services. Even when I was a councillor I argued strongly for that. However, I was against a rate increase on the commercial side because Kildare was moving ahead of the rate of inflation at the time. I would have supported the establishment of a fairer and more equitable base.

I welcome the provision regarding houses that have been adapted to make them suitable for people with disabilities. I tabled a number of parliamentary questions on this matter before the Bill was published and I am delighted the Minister has taken account of this issue.

There are a couple of things that make me nervous. They are situations that might arise only once in every 10,000 cases. In The Field by John B. Keane, which deals with the auction of a field, as two people are hungry to buy the field, it drives the price above the guide price. It is possible for that to happen. Somebody might have a valuation on his or her property and pay the tax based on that valuation. Let us say he or she puts the property up for sale after about five years, and two people are interested in buying it. There is a guide price that is similar to the valuation the owner had on the house. However, the two people interested in purchasing the property drive the price far above the guide price. There is a fear that in such a case the Revenue Commissioners will pursue the vendor and claim he or she did not put a proper value on his or her property. It is an anomaly that happens when a number of people are anxious to buy the property and drive the price above the guide price. That happened during the Celtic tiger economy, when two or three people wanted to buy a property. It is something that should be considered in an amendment to the legislation. Where an abnormal situation such as that occurs, there should be some way of rectifying it without a penalty for the vendor.

It is provided for that 65% of the tax is to be retained locally. I believe more should be retained. People who pay for something like to identify where that money goes. It could be going into a big black hole; big government has many such holes. If possible, there should be some other way in which counties such as Deputy Bannon's county of Longford, which are not generating the same rate base as my native County Kildare, for example, could be subsidised. Invariably, more heavily populated counties have more traffic on the roads, greater usage of street lights and more need for playgrounds. Where a large number of people are paying rates in that county, they should see the benefits of that. I believe a larger percentage should be retained in the county in which it is paid.

I intend to criticise Sinn Féin. It is strange what one discovers when one does a little research. Previously, I would have called Sinn Féin a two-headed monster, with one head facing to the North and the other facing to the South, and the head that faces the North reacting differently from the head that faces the South. Down here its members are shouting and roaring that there should not be a property tax or any type of tax on people's homes. They call this tax a home tax. However, I hold in my hand a copy of the rate poundages for the last four years in Northern Ireland. It is strange reading. I was a member of Kildare County Council for a number of years during that period and I argued for a drop in commercial rates or a maintenance of the rate at the same level. That is being done throughout the country. However, Sinn Féin is in charge in Northern Ireland. In Newry, where 14 of the 30 councillors are Sinn Féin, the rate has increased each year for the ordinary people. They are Irish people. There are, therefore, two categories of Irish people in this country. I have just read a synopsis of Animal Farm. It starts by stating that all animals are equal, but Napoleon eventually decides to change that by stating: "All animals are equal, but some animals are more equal than others." Does Sinn Féin consider the Irish in the South more equal than the Irish in the North?

Deputy James Bannon

Property taxes, household charges, water charges and licences for televisions that people may or may not have are the new face of stealth tax in Ireland. I say this as a Government representative who resisted the imposition of one stealth tax after another by the previous Administration. My conviction that such a burden, disguised in whatever format, is not justified remains the same.

However, I must give credit, or discredit, where it is due. The reality is that we are suffering from the fraud, corruption and cover-ups perpetrated by Fianna Fáil. It is indisputable that Fianna Fáil agreed this property tax with the troika. It is responsible for imposing what the Taoiseach once described as a "vampire tax" on the people. Fianna Fáil's actions in conspiracy with some developers, builders, bankers and senior executives resulted in a meltdown that can now only be resolved by the taxpayer. Fianna Fáil might in hindsight think it is sufficient to make false claims and look innocent. However, we should make no mistake: despite the denials, it is Fianna Fáil that is picking the pockets of our citizens - not that there is much left to take. It is dreadful to look across the Chamber today and see no Member from Fianna Fáil, or indeed from Sinn Féin, present.

Deputy Mick Wallace

We are here.

Deputy Clare Daly

The Deputy was not here earlier when we were here.

Deputy James Bannon

It does not surprise me given that those Members voted yesterday against extra time for this important debate. When the Tánaiste offered them the opportunity to continue the debate until 5.30 p.m. today, Fianna Fáil and Sinn Féin voted against it.

From the moment a property tax was mooted, it was implicit that while it had to be introduced, it would be fair. The outcry from all parts of the country and in my constituency of Longford-Westmeath indicates that this is not the case. Budget 2013 decreed that €3.5 billion must be raised, made up of €2.5 billion in expenditure reduction and, most importantly in the context of this debate, €1.25 billion in revenue. The mooted property tax became a reality. Fianna Fáil proposed and agreed it, but now its members cry crocodile tears at its introduction. On each side of the House there are conflicting viewpoints as to whether the troika required Ireland to introduce a property tax. Due to Fianna Fáil's actions, it did. More specifically, debate is most heated as to whether we should or should not take heed of such a requirement.

We are told that Ireland is the only country in Europe that does not have such a tax. This argument fails to take into account the fact that other EU countries do not have the same punitive level of stamp duty that applied in Ireland. On numerous occasions I made a strong plea to the Minister for Finance on behalf of people who are in serious negative equity. I welcome his comment this morning in opening this debate that there will be some concessions in that regard. One way or another, we are entrenched in a nightmare return to the horror of evictions, driven by the corruption of a so-called elite. As history repeats itself, the landlord is not the English squire, but the effect is still the same. We have been forced once again to doff our hats, this time to Europe, but driven to poverty by the actions of our own, particularly Fianna Fáil and, when it was in government, the Green Party.

Of great concern to me is the effect the tax will have on our architectural heritage. People could be forced by hardship to unroof their fine historical houses to avoid this levy. As we seek to encourage tourism through The Gathering and generate interest in our heritage, this would be devastating. Heritage is the cornerstone of our tourism industry. We have seen the heritage budget shamefully cut over the last number of years. It is now time for a considered approach to the reality that taxation could be the last straw. Rural Ireland could be given a huge boost if exemptions were linked to a willingness to open properties to the public and tourists in varying degrees. This of course would be dependent on the State's being prepared to cover insurance costs. Given current insurance prices, it would probably cost more than the property tax to provide public liability cover.

The role of our fast-disappearing great houses was wonderfully portrayed in a film I saw recently, "The Raj in the Rain". It portrayed a landed gentry whom many would erroneously consider to be more foreign than native. The sad fact is that today only 30 such families occupy their original estates.

Dáil Éireann debate - Friday, 1 Mar 2013

Finance (Local Property Tax) (Amendment) Bill 2013: Second Stage

Dáil Éireann debate -
Friday, 1 Mar 2013