That leave be granted to introduce a Bill entitled an Act to amend the Finance (Local Property Tax) Act 2012 to make provision for a partial exemption of property tax payable by a relevant owner whose property is located in a managed estate on which the owner of said property is liable to the payment of management fees and to provide for related matters.
I thank you, a Cheann Comhairle, for giving me an opportunity to introduce this legislation today. This Bill is designed to amend the Finance (Local Property Tax) Act 2012 to make provision for a partial exemption of property tax payable by a relevant owner whose property is located in a managed estate on which the owner of the said property is liable to the payment of management fees and to provide for related matters.
Essentially, we are talking about managed estates and many people are familiar with this issue. It concerns estates where there is a management company and where the management fee has been paid. I must stress that aspect at the outset because there are many disputes about the payment of fees in many estates where there is a management company. I am proposing that this Bill should only apply to owner-occupier dwellings or housing units in estates where there is a management company. Where the management fee has been paid in full, such a person should be exempt from having to pay part of their local property tax in the relevant year. The amount would be equal to one third of the management fee, or €300, or one third of the local property tax, whichever is the lower.
In the Dublin area, I would estimate the average local property tax at €350. In the majority of situations, this might provide a relief of €100, €110, €120 or €130. It is not big money but it is a recognition for people who are paying management fees, so they will not be caught and have to pay double. The CSO estimates that there are probably 177,000 homeowners in this category. The maximum possible cost of this legislation would be €15 million out of the local property tax. In most cases, it could be over €100. There might be exceptional cases depending on the management fee and the value of the local property tax in a particular area where it could be higher, but the figures I quoted would cater for the average situation. This would grant recognition to people in estates who are now paying on the double. That is because in such estates - many of which include apartments, housing units or a combination of both - it was regularly a condition of the planning permission granted for such a development that there would be a management company in place.
The management company manages the estate, including the public areas such as roads, footpaths and lights. It is not just concerned with green areas, including flowers and other landscaping issues, but also shores, drains and surface water drainage. If these matters were not dealt with by a management company and the State took charge through a local authority, the council would have to pay for such work to be carried out. Therefore that work is being paid for by tenants or residents in those areas through the management company. They are paying the full local property tax so in this case there is an element whereby people are paying twice.
In these situations, people who sold housing units in those areas got the money but the developer might choose to have a permanent stream of income from that development. He or she might have set up a management company to oversee that and collect the money to have a permanent stream of income. That should be recognised and people should not have to pay twice for that work. This creates an incentive for some management companies and the people who own them not to have their estate taken in charge because they will lose that line of income if the local authority takes over the estate. In some cases, therefore, there is a financial incentive to maintain management companies in an area. As I said earlier, it can also be a condition of the original planning application which people have to follow.
This Bill represents one small measure concerning the local property tax. The legislation was rushed so I would also like to see the proposed revaluation date for next year being abolished.
We have introduced the tax. There was much disquiet about it, but it seems to be operating and has a high compliance rate, primarily because of the Revenue powers. I believe the Government will frighten people and put them off if it starts to discuss a revaluation date next year or the following year. We should let the tax bed-in for a long number of years before we revisit that area.
This is a small step for a particularly unfair burden for a particular group of people. We have included in our legislation people whose houses and properties were affected by pyrite. They should also have an exemption along the lines I have just mentioned, that is, up to one third of the local property tax, until such time as all the remedial work has been completed. After that they should pay the full rate. This is a small measure recognising the double payment in these cases. I call on Members to support the Bill.