Amendments Nos. 2 and 2a are technical alternatives to amendmentNo. 1. Amendments Nos. 1, 2 and 2a will be discussed together. Is that agreed? Agreed.
Local Government (Charges) Bill 2009: Committee Stage.
I thank the Labour Party for tabling amendment No. 2 and Senator Pearse Doherty for tabling amendment No. 2a. While I accept the principles behind amendments Nos. 2 and 2a, I am satisfied amendment No. 1 achieves the same purpose but in a more definitive manner. Both amendments seek to exclude mobile homes from the scope of the new change to which the Bill generally gives effect. Amendments Nos. 2 and 2a simply delete all references to mobile homes from the definition of building in section 1.
Amendment No. 1 goes marginally further in that it achieves all that amendment Nos. 2 and 2a do, but goes on to state that vehicles and mobile homes are specifically excluded from the definition of building. To this extent, it is slightly more specific and definitive and is to be preferred for that reason. There are arguments for and against levying the €200 charge on mobile homes.
Clearly, most mobile homes are used as a type of holiday home and constitute a second residence for that reason. Some mobile homes are located in sought-after locations and command significant prices on the open market. Such mobile homes can be more valuable than some holiday homes and are made of bricks and mortar. Local authorities provide services including, in many cases, water and waste water facilities and road access to facilitate the use of mobile homes, just like all other second homes.
I acknowledge there are arguments against bringing mobile homes within the remit of the charge. The point was made to me when the Bill was published that usually mobile homes are less valuable than a standard holiday home. Furthermore, many mobile homes are located in caravan or camping parks where the owner of the mobile home does not own the land on which they are located. There is also the fact that the owners of mobile homes normally pay an annual charge to the owner of the caravan or camping park in circumstances where commercial rates are levied on the park. Arguably, the commercial rates are a contribution for the other services provided by the local authority and the owner of the mobile home should not be asked to pay twice for the same service.
These are the arguments that were put to me when the Bill was published. I have listened carefully to all these points and have decided, on balance, to exempt mobile homes from the charge. In taking this decision, I was mindful of the fact that the revenue forgone by local authorities will be relatively small in the context of the overall revenue to which the charge will give rise.
We support the Government amendment on mobile homes. However, some questions and queries were raised on Second Stage regarding the definition of mobile home. I presume a mobile home is a home that is mobile and is something with wheels on it, but in many cases mobile homes are installed in a semi-permanent manner on a foundation with access to services such as electricity, sewerage and water. Can the Minister clarify that mobile homes installed in such a way will not be subject to this local government charge?
This amendment provides certainty. We examined all the definitions. We examined the phrase "de-mountable" and other issues. The Senator is quite right. There are instances, which I referred to in my contribution, where there are so-called mobile homes where wheels, etc. have been removed. We are examining situations where mobile homes are in caravan parks and it is quite clear they are there with other mobile homes. Such parks are very often paying service charges. We have been as clear as we possibly can on this matter. The idea is that we give certainty. We are saying clearly that mobile homes are excluded and that is at the heart of what Senator Doherty and the Labour Party proposed.
Amendments Nos. 3 to 7, inclusive and 9 to 13, inclusive, are related and will be discussed together. Is that agreed? Agreed.
I move amendment No. 3:
In page 4, to delete lines 20 to 24.
I will try to clarify our thinking on this. We are trying to be helpful with regard to the administration of the scheme and how moneys can be collected without putting a further burden on local authorities. Some Members suggested earlier they would prefer local authorities to collect the moneys. I understand that view, but that is only possible where the local authorities have the necessary resources and IT systems and all that goes with that. Unfortunately, as those of us with close connections with our local authorities realise, they are already overburdened by their workloads in this area and may not have the capacity to collect the moneys in the current circumstances. I have not seen anything in the Bill that provides extra capacity or resources to deal with the administration and collection of moneys in this scheme.
For that reason, Fine Gael has proposed these amendments. We identify the Revenue Commissioners as the appropriate authority or body to collect moneys. They already have the necessary capacity within their structures, both administrative IT support and otherwise, to properly and fully encompass all those who should pay this charge once implemented by law. That is the thinking behind our amendments. We did not put them forward to undermine the Bill but to strengthen the capacity to collect the funds that should accrue to local authorities. There is no ulterior motive behind them. We are being up-front on the matter.
Earlier, I outlined our concerns with regard to the Private Residential Tenancies Board's registration system. We are concerned about the backlog, the fact the system has not been updated and the fact the IT system is not up and running. I gather from reading the Bill that it is intended data and information will be shared between local authorities and bodies such as the PRTB. However, the PRTB's systems are not up to date and do not have the capacity for this. That is a further reason we suggest the Revenue Commissioners, who have the required infrastructure, are the appropriate authority to deal with the collection of these charges. If it is proven down the road that local authorities have the capacity and systems to do it, that will be acceptable. However, they do not have that capacity currently.
I thank Senator Coffey for his amendments and appreciate the sincerity of his motives. I acknowledge a number of the points made by Senator Glynn on the collection of moneys. He suggested town councils should be allowed to collect the moneys. The local authorities have assured us they have the capacity to collect the moneys and that they will distribute those moneys to the town councils appropriately. I am aware of the concerns expressed by Senator Coffey. The issue concerns the body or organisation within the public service that is best suited to administer the €200 charge. I assume Fine Gael's opposition to sections 9 to 11, inclusive, and section 15 follows on from the thrust of the amendments generally, which is to substitute the Revenue Commissioners for local authorities in administering the collection of the charge.
I fully accept that we must administer our public services as well as we can. I also accept the Revenue Commission is a very efficient organisation that has made major strides in recent years in facilitating compliant taxpayers to discharge their liabilities with the minimum of fuss and red tape. I have no doubt that had this function been assigned to the Revenue Commissioners, the organisation would have put in place effective management and arrangements to implement the charge. Equally, I am in no doubt that local authorities will do a very efficient job in carrying the legislation into effect.
The local authorities set up a project board after the 2009 budget to plan for the introduction of the charge. The Local Government Computer Services Board was asked to design a website, similar in concept to the motor tax on-line website, to accept Internet payments. This site will be up and running in time for the liability date of 31 July 2009. Other arrangements continue to be put in place in local authorities to facilitate the smooth and effective implementation of the new charge. I again encourage all concerned to use the website to discharge liabilities to pay the charge. This is in everybody's interest, especially those obliged to pay it. The website is efficient and user friendly and will make life easier and simpler for those who avail of it. For those who cannot or will not use this facility, local authorities will accept payments at their local offices.
There is also an inherent logic in paying the charge to local authorities given that these bodies will retain and deploy the revenue stream arising from it. This is a crucial point. Senators Coffey and Doherty said they would like to see the local authorities have more discretion on the matter because they are ideally suited to collecting the fee. In my meetings with the managers, they stressed that they wanted to do this job. As far as I am concerned, if they want to do it, they should be allowed do so. This is a major step forward for local authorities towards securing a genuinely local source of revenue that will reduce their dependence on central government funding, which is the thrust of the Green Paper and forthcoming White Paper.
I await with interest the report of the Commission on Taxation. Part of its terms of reference require the commission to consider options for the future funding of local government. I have every confidence the commission will do its work thoroughly. It will be very interesting to see what conclusions and recommendations it reaches. For now, the approach taken in the Bill that the proceeds of the charge will be collected and retained by local authorities makes sense for the reasons I have outlined. I am not, therefore, disposed to accept the amendments under discussion.
I am disappointed it has not been possible to accede to my request, but I suppose one does not get everything one wants. What guarantees are there in the Bill to ensure the moneys due to town councils will be passed on? Is there an appropriate statutory basis for this?
Section 15 will deal with this. It states clearly a county council shall make a payment each year to each town council within the county and such payment shall be calculated having regard to various matters. I do not want to go through the entire Bill but it is clear. Also, in discussions with the managers we made it clear we want to see the moneys distributed proportionately and fairly.
The reason I ask is that there seems to be an intention on the part of certain local authorities to take to themselves powers that would normally be devolved under law to the town councils. I am a strong defender of town councils, even though I come from a country area. However, I live in a town and see how effective town local government is. I exhort the Minister to use every opportunity he has to devolve more powers to town councils, not alone the rating authorities but also some of the former town commissions in sizeable towns such as Mullingar, Portlaoise, Greystones and Newbridge. These are large urban areas and should get what they are entitled to under the Act. If there is a statutory entitlement to the moneys, as suggested in section 15, there should be a statutory obligation on the county council to devolve the relevant portion of the charges normally due to it to the town councils within its administrative area.
I do not support Senator Coffey's amendments, although I know he addresses the same issues I raised in terms of the ability of the local authorities in their current configuration to collect this charge. On Second Stage, I made the point that local authorities may find it difficult to collect this charge bearing in mind it will be much easier to collect it for rental properties than for holiday homes, particularly if the owners are outside the jurisdiction.
If there is a need for employment of additional personnel, will this be granted by the Department or is there a mechanism in place given the embargo on public sector employment? I gave the figure of 8,000 holiday homes in Donegal. I am sure there will be a problem in terms of collection and the local authority may need to employ additional staff to do this. While it is not specified in the Bill, is the Minister disposed to this suggestion? It would alleviate some of my concerns.
The Minister referred to central administration and the website, which is a great idea, but it runs counter to what I want to see, namely, that local authorities would be able to raise their own funding. A standard flat rate is very easy to administer centrally and people should use the website to make their payment. The legislation allows for the reimbursement of town councils, which Senator Glynn raised, but there is also the issue of the expenses accrued by local authorities in the collection of the charge. In terms of the central administration of the website, how will the expenses incurred in collecting that money——
It is referred to in the legislation.
Perhaps the Minister will point it out to me in the Bill.
To deal with the Senator's point, it would be wrong of me, as Minister, to give him a commitment that the local authorities will be allowed to employ more people — I cannot do that. In these very difficult economic circumstances local authorities are redeploying their staff in different ways to try to achieve efficiencies. Given that there is an incentive for them to raise this money, they will do everything they can to do that. I insisted that the money would be retained by local authorities and would not go into central Exchequer funding because that would immediately incentivise the local authorities to do this. We need to incentivise the local authorities and we need to regenerate local government in this country and not just have local administration. I see this as the initial step in that regard.
On the administration, section 13 states: "The expenses incurred by the Minister in the administration of this Act shall, to such extent as may be sanctioned by the Minister for Finance, be paid out of moneys provided by the Oireachtas." However, on the Senator's specific point, the Local Government Computer Services Board is the body which will administer this on behalf of local authorities and it will pay for this itself.
The Senator raises an interesting point, however. If we give discretion to local authorities to vary the rates as they see fit, there will of course be different rates for local authorities. This is fine and in other jurisdictions where there is real local government, one will find that rates vary from state to state. However, it raises difficulties in the administration, which is an issue for the local authorities to consider. As Senator Coffey noted, local councillors have been voted in and it is up to these elected representatives, not the management, to make these decisions. They have to take into account all the pros and cons, and consider what it costs to administer the system. There is no point in burdening themselves with red tape. They should try to make this as simple as possible to collect, which is the whole point of the legislation, so they can collect as much money as possible.
I re-emphasise Fine Gael's concerns. The Minister has confirmed he cannot give an undertaking that local authorities can take on additional staff to deal with this extra workload despite the burden it will create. The Bill states that the Department estimates that in excess of €40 million can be raised through this local authority charging system. However, the Oireachtas Library and Research Service produced a very interesting digest on this Bill, which is very helpful to Members, and according to its calculations the system could raise in excess of €97 million. There is a difference between the two figures.
We are concerned this issue has not been analysed thoroughly enough to identify that local authorities have the capacity to deal with this workload, which is the focus of the amendments. I have outlined the problems in the other areas where the Minister is hoping to get information and data. We heard evidence from the PRTB in committee yesterday that until mid-2010 at the earliest it will not have a suitable ICT system which would allow it to have a proper, managed registration system that can transfer information to local authorities and others. I keep emphasising this point because I can foresee problems if this Bill is implemented as proposed. We feel the Revenue Commissioners have the better capacity, systems and resources to deal with this. While I would rather see local authorities collect the charge, I am not convinced they have the capacity to do so. For that reason, we stand by our amendments.
I am sure the Minister and all of the 34 local authorities involved would be delighted if the outturn from this Bill is in the order stated by Senator Coffey, and I would be delighted for local government in its fullest sense, but the Minister must err on the side of caution. What may contribute to the nature of Senator Coffey's prognosis is the number of unregistered facilities. Given there is now a basis for having a charge on the type of residential units that are outlined in the Bill, it becomes financially beneficial to the local authorities covered under the Bill to ensure that all units are registered, so there is an incentive in that regard. If that is the case, perhaps the forecast of Senator Coffey would prove true but, as of now, the Minister, who is capable of speaking for himself, is basing his predictions on what is known to be the number of units throughout the country.
I am disappointed with the Minister's response. While I can understand why he cannot take acarte blanche approach to the employment of additional staff, I had hoped that in the future he might be disposed to particular requests if they arise.
On the amendment, the Minister's point with regard to the incentive for the local authority to collect its own rates is very important, which is why I do not agree with the Fine Gael amendment. Local authorities collect their own rates but in Donegal, for example, a huge amount of outstanding rates remain to be collected. As a member of a local authority, I was able to approach the county manager and his executives and inquire why the rates were not being collected. Local authority members would not have the opportunity to sit in front of a board of the Revenue Commissioners to inquire why it has not collected rates on their behalf. Accountability is at issue here and, God help us, there would be an outcry in Donegal if the Revenue Commissioners in Dublin began to collect the rates and Donegal was left at the end of the pile again. It is an executive function but at least there is some accountability and at budget time it is possible to discuss the matter with the manager, housing officials and the local team. This is why it is important to leave the incentive in place and ensure there is democratic accountability in the collection of these rates. I oppose the amendment although I understand that it comes from the same line of thought which I raised, that is, the concern that local authorities may not have the capacity to collect the rates if there is an insufficient number of staff and there is a need to employ additional people.
Senator Doherty has given some very coherent arguments against the amendment and I understand fully the thinking behind it. It is seen to improve the efficiency of the collection system but I assure the Senator that local authorities have assured me very clearly that they wish to collect the rates themselves. As Senator Doherty stated, a centralised collection system in Dublin would not go down especially well in local authority areas. Local authorities have the knowledge and the incentive to collect.
In many ways this is a work in progress, which is also one of the reasons we were prudent enough to give a conservative estimate of the amount of money that could be collected. I recognise the library service has come back on this and this morning Senator Doherty referred to a sum of €97 million. If a comparable sum were involved it would be fine and we would have exceeded our expectations. The Senator will appreciate that, as Minister, if I came to the House and stated that I expected to collect a certain amount, of which we fell short subsequently, the Opposition would have a field day. Therefore, it is better to err on the side of caution in these matters, which we have done. I have no doubt that as the local authorities improve their collection systems and as computerisation systems improve, they will become very efficient in the collection of the €200 charge.
Computer services are improving. This morning I launched a new system of e-planning for Dublin City Council. It is fantastic and it can do everything necessary for that process. One can enter objections with all documentation and all one requires is a credit card to do so. This will significantly cut down costs. In any revenue raising exercise the idea is to make the process efficient, increase competitiveness and cut down on costs and red tape. Most individuals are very computer literate now. Everyone logs on to the Ryanair website now to book a flight and there is no problem or difficulty. Likewise they will have no difficulty paying the €200 charge. They may not wish to pay it but the incentive is there for them to do so, of that there is no question.
I fully agree with the Minister's comments on information technology, IT, systems and that we should encourage all opportunities to improve efficiency and registration. I simply pointed out that local authorities will be very dependent on agencies such as the Private Residential Tenancies Board, PRTB, for its database of registered properties which are not principal residences. Despite the establishment of the board four years ago it still does not have an IT system, database or registration system and it will not have such a system for another two years. The relevant section of the Bill specifically states that local authorities will depend on such agencies for data exchange and interface. My point is that that system is not available at present and until such time as it is, the Fine Gael position is that the agency, Government body or arm with the necessary capacity, authority and infrastructure is the Revenue Commissioners. I fully understand the point made and I would prefer local authorities to collect the charge, but my genuine and sincere belief is that they do not have the capacity. They would run into untold problems in trying to collect it, there would be a great number of allegations of people not disclosing second properties and there would be too many referrals to the Private Residential Tenancies Board, which is already overburdened with substantial backlogs. The board would not be able to confirm whether people are registered because its lists are already so high and they must be manually input. This is a genuine concern on this side of the House.
I wish to clarify the matter for the Senator. I accept the PRTB system requires updating but it will work in transferring data, which is important. Any difficulties with that system would also apply to the Revenue Commissioners. I do not see how the amendment——
The Revenue has a system but the PRTB does not.
The PRTB has a system, which requires updating, the Revenue Commissioners has a system and the local authorities have a system. This is the point. I do not understand how the amendment would deal with the matter in a conclusive and fully coherent way.
Local authorities do not have a system which allows them to account for everyone's house or second house.
I am trying to explain that I do not understand how the amendment would deal with this issue. The PRTB seems to be the problem.
The PRTB is a problem but if the Revenue Commissioners does not have the information, it should have it and it is an offence if people do not declare a second property to the Revenue. There is a mechanism for penalties and everything else in that regard. The legislation puts the cart before the horse. We should get it right from the beginning and there is no point falling into these pitfalls now. We should try to get the legislation right, otherwise we may have to revert to the House later to deal with the loopholes.
That is a fair point.
I come down on the side of the local authorities for one simple reason. A local authority will grant planning permission — some constructions may be built without planning permission but these are the exception to the rule — and it is always a condition of planning to outline usage of the facility. Therefore, using this argument, the local authority is best placed to know exactly what is taking place. I am not saying they do or they would, but local knowledge will play a pivotal role in this matter and it will complement the legislation.
Let us consider the ideal situation — idealism is a wonderful concept but practicality and application are very different matters. As of now, I do not know of any better authority to administer the legislation than the local authority for the reasons given. The Revenue Commissioners is the same as every other entity in the country. It knows what it is told but if it is not aware of what is taking place it can do nothing about it. It is that simple.
- Boyle, Dan.
- Brady, Martin.
- Butler, Larry.
- Callanan, Peter.
- Carty, John.
- Cassidy, Donie.
- Corrigan, Maria.
- Daly, Mark.
- de Búrca, Déirdre.
- Doherty, Pearse.
- Ellis, John.
- Feeney, Geraldine.
- Glynn, Camillus.
- Hanafin, John.
- Keaveney, Cecilia.
- Leyden, Terry.
- MacSharry, Marc.
- Norris, David.
- Ó Domhnaill, Brian.
- Ó Murchú, Labhrás.
- O'Brien, Francis.
- O'Donovan, Denis.
- O'Malley, Fiona.
- O'Sullivan, Ned.
- Ormonde, Ann.
- Phelan, Kieran.
- Quinn, Feargal.
- Ross, Shane.
- Walsh, Jim.
- White, Mary M.
- Wilson, Diarmuid.
- Bradford, Paul.
- Burke, Paddy.
- Buttimer, Jerry.
- Cannon, Ciaran.
- Coffey, Paudie.
- Coghlan, Paul.
- Cummins, Maurice.
- Fitzgerald, Frances.
- Hannigan, Dominic.
- McFadden, Nicky.
- O’Reilly, Joe.
- Prendergast, Phil.
- Regan, Eugene.
- Ryan, Brendan.
- Twomey, Liam.
I move amendment No. 3a:
In page 5, subsection (1), between lines 10 and 11, to insert the following:
"(i) a building which is occupied as a dwelling by a parent or both parents of the owner,
(j) a mobile home,
(k) a building which is the subject of a dispute in relation to probate for a period of five years or more.”.
We propose this amendment to section 2 regarding the meaning of "residential property". In my Second Stage contribution I said this area needs clarification, and that is the reason we propose this amendment. If somebody is living in a granny flat beside an existing dwelling, according to the Bill that granny flat is considered to be a second dwelling and is possibly subject to the charge.
Also, if a family home transferred to a son or a daughter who may have got married and moved on but the house remains in their name, with the parent of that son or daughter remaining in the house, there would be no rental income from the house yet under the terms of the Bill that house would be liable for the charge. That is inconsistent with another area in Revenue in that where a house is inhabited by the parent of the owner and there is no income from that house, it qualifies for mortgage interest relief. The general principle should apply in this Bill as well where there is an acknowledgement that the parent is living in a house provided for by a son or a daughter, which is reasonable to expect in any circumstances. It is not an investment property nor is it rented out at any stage. Should the parent move on or whatever and the house was then used for rental purposes, I would have no problem with it coming back into the other category where a charge would be liable, but where the parent is still living in the house Fine Gael believes the charge should not be levied in that instance. There are many instances of parents living in accommodation provided by their children in good faith in recognition of the upbringing and care they received. It is not an investment and I would ask the Minister to consider the amendment favourably in that regard.
This is a relatively short Bill of which we are generally supportive because it will support local authorities in the work they do, but it could prove troublesome if issues such as this one are not fully thought out. What we do not want, as Senator Cummins said earlier, is to have to come back to this House with new Bills and new amendments in a relatively short period because of difficulties such as those I have pointed out.
In regard to mobile homes, which the Minister dealt with in his earlier amendment, Fine Gael asked that they not be considered a residence but a holiday home, which is what they are, and that they would not come under the category of the charge.
We also refer in our amendment to "a building which is the subject of a dispute in relation to probate for a period of five years or more". The reasoning behind that is that in many cases throughout the country disputes arise with regard to property in probate. Those disputes can run on for a number of years and we would consider it reasonable that until such disputes are resolved and there is a clear outcome as to the owner of the particular houses, they would be considered outside the category for charge. I would be interested to hear the Minister's views on that or if he has a better suggestion.
This amendment was rushed. To be honest, this legislation appears to be rushed. We would like more time to consider all sections fully and reflect on and propose amendments that can work. I would be happy to hear the Minister's views on the issues I have raised, specifically the one with regard to parents. He might clarify the position on granny flats which are individual dwellings. They have their own electricity accounts. The Minister will refer later to applying to the ESB and so on for information. They have all their own services and electricity and they are stand-alone. I would like clarification from the Minister that they will not be charged this levy. He might also deal with the question of exempting from the charge the houses where the parents of the owners live and from which there is no income.
I support Senator Coffey's amendment. In some countries people live in barges on rivers or lakes, and quite a number of people in this country live in barges. In some cases they use them as second homes or whatever. What is the position on those? The Minister has qualified the position on some dwellings, including caravans in caravan parks, but he might qualify the position on barges.
I support Senator Coffey in regard to paragraph (k) of the amendment to section 2. He made the case where probate has taken place. Disputes over houses or properties that arise among family members can take a considerable time to settle. The fines the Minister has put in place are hefty and a situation might arise where the person who gets the home following settlement of a dispute could be liable for a considerable charge. The Minister has spelt out in the Bill that it is the person who buys the house who pays. The obligation should be on the person who sells the house to ensure the property is clean of debts and charges. For cases of dispute or where probate takes a considerable time, Senator Coffey’s amendment is sensible. An exemption of at least five years should be allowed in the case of probate. I support Senator Coffey’s amendment.
Will the Minister clarify the status of second homes following the enactment of the NAMA legislation? I know that legislation will not come to the House for some time but it I presume it will result in NAMA owing a significant number of finished, unfinished or partially finished housing estates, some of which may be let to third parties. If NAMA, as a corporate body, has ownership of such properties, will it come within the remit of the legislation? Will the legislation extend to banks which have repossessed houses? What will be the status of a financial institution which, having repossessed a house, enters into an arrangement to allow a family to remain in a house as tenants or tenant purchasers? Will such a bank be liable for the €200 charge?
I support Senator Coffey's amendment. The Senator said the amendment was rushed. I have placed amendments which are similarly rushed. The legislation clearly needs to be changed.
I have personal experience of people whose houses will be subject to the levy in circumstances which the spirit of the Bill never intended. Senator Coffey's amendment refers to a house owned by the son or daughter of the occupant. Such a house should not be subject to the levy. I do not believe it was the intention of the Bill to make such people pay €200.
In other situations a mother or father may have passed away, left a house to an eldest son and another sibling may continue to reside in the house. This is another anomaly. Such a house would also be subject to the levy. Several small issues need to be tidied up before the Bill is passed by the Seanad and Dáil. I hope the Minister is disposed to consider them. I support the amendment. I believe it may need to go a little further.
Senator Burke raised the question of barges. I do not think they qualify as buildings and, therefore, are exempt from the legislation.
The Bill refers to homes and not buildings.
It is clear to me that barges are not covered by the legislation.
More than the Government will be at sea after all of this.
I suppose barges are at sea on occasion. Senator Bradford raised the prospect of the NAMA legislation. That legislation has not been published. This Bill states clearly that properties which are newly constructed but unsold are exempt. NAMA will be concerned with precisely those types of properties. They would not fall within the remit of the Bill. Nevertheless, I will take Senator Bradford's concerns to the Minister for Finance who is currently working on the NAMA legislation.
I thank Senator Coffey for his amendment which seeks an exemption from the charge for three instances. I also received the amendment quite late because Senator Coffey was also under pressure. I have had to look at the various categories he has outlined: property in which a parent of the owner resides, mobile homes, and properties which are the subject of probate difficulties. My amendment has dealt with the mobile home issue. No charge will apply to properties before probate has been taken out. When and if probate is finally granted, someone will own the dwelling and I can see no reason the normal provisions of the Bill should not apply.
It is a core principle of the Bill that owners of residential property are, in the normal course of events, liable for the charge. This will apply to owners of property irrespective of whether a family member lives in it. The colloquial expression for the instance to which Senator Doherty referred is "granny flat". Under normal circumstances, this would not be liable to the charge if it is part of the dwelling concerned. It is more difficult if the home is a stand-alone building. That is a different situation. A stand-alone building is liable.
What is the definition of a stand-alone building? In many cases, a second home may have its own electricity connection and the parent or sibling may pay his or her own ESB bill. Would such a home qualify as a stand-alone building even though it is part of an original dwelling?
There are several anomalies in the Bill. We are only scratching the surface. We need more time to consider the Bill. I hope we are not forced to complete Committee Stage later tonight or tomorrow afternoon. We need another week to digest the Bill and to examine the amendments which have been submitted by various parties. The Minister himself has mentioned that the Bill is rushed.
I said I received amendments at the last minute.
The Opposition also submitted them at the last minute because we received the Bill so late. That is another reason more time should be given to digest the Bill. It will be challenged every step of the way, not in the Houses but outside, where they are queuing up with their legal advisers ready to pounce on the Bill and pick out loopholes. It is important that we dot all the i's and cross all the t's before the Bill becomes law.
The Minister should spell out his intention more clearly. There are many cases in rural Ireland where a son or daughter applied for planning permission to build an extension so that two families can live under one roof but in two separate living quarters. The reason they do this is so the offspring can look after their parents. We have been advocating this for many years, so people can be kept out of hospitals and be looked after by their families. That policy has been promoted by everybody. In this case, there could be two separate electricity bills to ensure the pensioner gets their entitlement to free electricity, fuel and so forth. What the Minister has said leads me to believe that there would be a charge for the type of development where there are two houses within a single structure, with the parents living in one and a son or daughter with their family living in the other. The Minister should explain this in more detail.
The other issue is who will be the final arbiter. Will the county manager make the final decision as to whether it is just one house or two houses? Somebody has to decide whether the €200 fee applies. Who will be the final arbiter in these cases?
I believe we all have the same perspective on this Bill, although our interpretation of it might be different from the Minister's. Senator Coffey's amendment deals with parents and any house, not just a granny flat. Over 400,000 houses will be subject to this levy. A number of people will be in the situation of having a granny flat or where the son or daughter owns the house where the parents are living. It is not a huge number; it will not be in the tens of thousands. If this legislation passes and local authorities charge €200 on a granny flat or a family home in the possession of a son or daughter where the parents who might be in their 80s or 90s are residing, it will cause uproar in local areas.
There should be a simple amendment to the legislation. I have dealt with the granny flat issue in amendment No. 6b. I cannot see in the legislation where a granny flat, which is a self-contained flat adjoining the house, would be exempt from the levy. I agree with Senator Paddy Burke. These amendments might not be the best, given that all of this was rushed, but time should be allocated to examine some of the issues that have been raised. A number of exemptions are necessary. They will not change the spirit of the Bill but will clarify what everybody wants to achieve. They will also deal with the outrage that will occur in rural areas, particularly if county managers, under the letter of the law, start to impose these levies on houses to which it is neither my nor the Minister’s intention that they should be applied.
I agree with the concept of the levy. However, I have listened to the debate and many problems appear to be arising. I received a telephone call last night during which the caller asked about the situation of a landlord who has a second house in which there are three or four flats. Does the landlord pay just one levy on the second house or is there a levy for every flat? I could not answer that question. There is much confusion about this. Senator Paddy Burke has raised some interesting points. It will create havoc in the local council area. I am curious to know how the county manager will implement it.
Having listened to Senators from all sides of the House, it is down to interpretation. We must be clear about how the legislation should be interpreted by those in authority, be it a county manager or the final arbitrator on whether a building is liable for this charge. The Minister's assessment is too vague. I can offer another example that is widespread throughout the country. Consider the cottage acre on which a family was reared. After securing planning permission for a house on the same cottage acre, the younger people in the family move into it and the entire property is transferred into that person's name. However, the parents still reside in the old dwelling. The charge will apply to that dwelling under the terms of this legislation. That is the issue.
I accept that the wording of the amendment might not be good enough or acceptable but if we could be given an undertaking in good faith from the Minister that he will address this area of exemption with wording from the Parliamentary Counsel, I would accept that. Until we get such an undertaking, however, this is all that is available to protect the elderly parents in those dwellings who will be levied with the charge. It is unfair. In paragraph (j) the Minister has dealt with mobile homes, which is fine. Perhaps he would also clarify if the charge applies where the ownership of properties is in dispute.
This measure was announced in mid-October 2008 but the legislation is only before the House now. We are expected to pass it through all Stages today. This is rushing the analysis of the Bill. If we put time into it now, it will prevent problems down the road. Fine Gael is generally supportive of the principle of the Bill, but it is too vague and open to interpretation. There must be clearer definition in many areas. The time allocated for the various Stages will not allow us to analyse properly and digest even the information the Minister is providing. I ask the Minister to consider that. We will try to be helpful but the Minister must take our amendments seriously. Otherwise there will be many problems when the Bill is being implemented. In the case of the cottage acre and an old person living in the original house, they will be levied because of the person living at the back or the side of the house. The matter must be clarified further.
With regard to the exclusion of a building that forms part of a trading stock, in the current climate many builders are entering into short-term leases under lease to buy schemes, in the hope that in a few years the apartments or dwellings will be purchased. My reading of the Bill is that the levy applies to those short-term leases. What lease term would be excluded from the levy? I live in a town where the old colonial landlord still owns a considerable part of the town's residential area. People have their homes on long leases. What is the situation there? The leases could be 30, 50 or 100 years in some instances. In the case of apartments, the owners of the apartments do not hold the freehold. That is held by a management company. The apartment owners have a 999 year lease in most instances. How is the provision applied in that situation? Although the €200 is not a significant figure, if it were to increase it might be an impediment to builders participating in the innovative lease to buy concept, given the current difficulties in the construction sector.
With regard to the house on the cottage acre where the son or daughter gets planning permission and builds a house which becomes their normal residence, the old house is the normal residence of the parents so, clearly, the levy would not apply in that situation. That is my view. However, if the situation changes with the demise of the parent or parents and the house was rented, the situation might change. There is also the case of a house with a number of bed-sits. These are not self-contained units so they could not be described as apartments in the established sense. Invariably, they share services so I do not believe they come under the remit of the Bill. However, if they were self-contained units, that is, with cooking, shower and bathroom facilities, they would be liable to the levy.
Many thousands of people receive rent allowance from the HSE. To the best of my knowledge, they must know their landlords but because of the Data Protection Act are not obliged to inform local authorities about them. Is it intended to amend the Data Protection Act so this type of information might be shared by the various agencies? That was one of our reasons for tabling the amendment in the first place because under that Act the Revenue Commissioners are exempted from obtaining that type of information. That is another area that must be addressed in greater detail in this Bill. If he does not have the information, perhaps the Minister might get back to us on this matter. The whole area of data protection and the sharing of information concerning two landlords, whether the PRTB, the local authority, or whoever, must be addressed on Report Stage. Currently the HSE is not obliged to give landlords' names to local authorities.
I shall deal with Senator Cummins's last point. Section 11 deals with it clearly, stating:
Notwithstanding any enactment or rule of law, a relevant person shall, upon a request from a local authority, provide the local authority with information in the possession or control of the relevant person or its subsidiary as the local authority may reasonably require for the purpose of enabling the local authority perform its functions under this Act and a local authority shall, at such intervals as the Revenue Commissioners may specify, provide the Revenue Commissioners with such information obtained by the local authority pursuant to this Act.
We have dealt with that issue. There are others——
I apologise for interrupting the Minister. Does this mean the HSE, which provides rent allowances, is obliged to give the names of the landlords to the local authorities?
That is stated very clearly in the legislation. It is dealt with in section 11, on data sharing and exchange, and is clear.
I must disagree with some of the comments made by Senator Coffey. I tried to be as clear as I could and we tried to offer clarity. The Senator raised the issue of the granny flat and I stated very clearly in my reply that it would not be liable for the charge if it is part of the dwelling in question.
I return to the other questions. Senator Ormonde raised a similar issue and I draw attention to section 2(2) of the legislation which states:
For the purpose of this Act, a bedroom forming part of a residential property that is let under a letting arrangement whereby the individual occupying that bedroom is entitled to share with any other individual any other accommodation, amenity or facility in the property, is not a residential property but the building of which it is a part, is.
That section deals with a situation in which a number of people are in a place together in separate rooms. However, if there are separate apartments, clearly those apartments are subject to the charge and again, that is very clear.
I appreciate that Senators have raised legitimate points. I wish to examine all of them and as we go through the various Stages of the Bill, I shall continue to do so.
I forgot the issues raised by Senator Walsh. He raised a number of points about leasing arrangements. If a property is being leased it is subject to this charge and there is no question about that. Regardless of whether the arrangement is what the Senator referred to as a long-term lease or, as in some cases, a short-term lease, the property is still subject to this €200 charge.
Will it include owner-occupier apartment owners?
Under this legislation, such people are subject to the €200 charge. That is the situation and I tried to make it as clear as possible.
I see other Senators indicating and I am happy to take questions or points.
Who is the final arbiter? Is it the county manager?
The Senator referred to the final arbiter. Obviously, if there is a dispute the matter will go to the courts and the final arbiter in such cases will be the courts. Before that, it is a matter for the local authority.
I agree with the Minister. He is trying to be clear, giving Members as much clarity as he can with regard to our questions. However, this legislation does not allow him to provide us with any clarity and that is the issue.
Concerning the exemption of a bedroom which forms part of a building, that is specifically referred to in the legislation. However, the great majority of what we describe as granny flats consist of much more than a bedroom and usually contain a kitchenette or dining area and perhaps even a living room. My interpretation of the legislation is that once the accommodation occupied by an elderly relative, perhaps a mother or father, exceeds the definition of a simple bedroom, the owner is automatically liable for the charge. As Senator Coffey outlined, the person may be paying a separate ESB bill. If the Minister is making the argument that the building forms part of the main principal residence he must equally make the same argument in respect of apartments that are a component of a larger overall block of apartments.
Senator Glynn referred to "normal residence". If the elderly people occupying the cottage-house of which we spoke consider it to be their normal residence they would not be liable for the charge. As far as I can judge, the phrase "normal residence" does not occur anywhere in the legislation which simply states that the owner of a property, as defined, is liable to pay this charge and other than that is exempt from the charge if the property is occupied by the owner. If it is occupied by somebody other than the owner the charge automatically applies. Therefore, if I own two properties, one of which is my principal residence, the other the property next door where my parents live, I am liable for the charge. It is quite explicit and easily gleaned from the legislation.
Was that to be covered in the Succession Acts?
I have a question for the Minister. Lord Lucan owns a considerable amount of ground rent in towns such as Castlebar.
I thought he disappeared.
He has disappeared and we have not seen him for many years.
This is where the Invisible Man originated.
In the case of leasehold and leases, is it the likes of Lord Lucan who must pay this charge or to whom does it apply? Ground rent is being paid for some of these dwellings. In this case, the person living in the house should not have to pay the €200 — Lord Lucan should pay it. I do not know how one finds out where he is. Does this throw the entire legislation up in arms?
I understand what the Minister said about the courts being the final arbiter. Will the county manager make the decision and say that the €200 must be collected, that the person will be followed for it and if there is a dispute that it will go to the courts? In those cases where there is a derogation concerning collection, is it the county manager who will make those decisions?
I shall do my best to find Lord Lucan's address for the Minister but I can see some difficulties down the road.
I return to a point I raised earlier. Unfortunately, I will not be present to discuss some of the other amendments because I have an essential appointment.
I realise the Minister has given clarification regarding the situation of granny flats. I have read the legislation and I know the granny flats in my area, which are self-contained flats adjoining an existing house. They are not an extension to a house creating additional rooms, perhaps a dining room, a bedroom or a kitchenette. It is not a matter of walking through one door into another couple of rooms. They abut but are separate flats. They are like houses in the country that used to be single but are now——
Exactly. They incorporate small flats.
With planning permission.
People enter via a separate entrance and have their independence, but they are next door to their sons or daughters. This type of security is the beauty of the granny flat. From my reading of the legislation, granny flats are subject to the €200 fee. The Minister's interpretation of the matter we are discussing might relate to a number of additional rooms in a house to give a mother or father a quarter of the house. Obviously, such an arrangement would not be subject to the levy.
My amendment No. 6a deals with this issue effectively, but not with all of the other issues. It is not just a question of parents but about sons and daughters. There are many anomalies because nothing is black and white when it comes to housing, leaving houses to sons, daughters, brothers or sisters and different people residing in houses. The problem with the legislation is that we needed to define “ownership” as belonging to the owners of the house, which was the only possible definition. However, it means that we must deal with many anomalies, some of which we have not identified. I gave an example, but I could name people from my home town of Gweedore who leave home every Monday morning and return Saturday while renting houses in Dublin. Their homes will be subject to the levy because their houses——
I heard the Senator make that point this morning, so I got information on it. It is not the case as laid out.
I would be more than happy to consider the legitimate questions being asked by the Senators and I do not want to proceed until they are happy with my answers. I will happily remain for as long as it takes to tease out the issues. With any legislation, there are issues that are not fully addressed, as Senator Doherty pointed out. However, I want to consider all of these issues as best we can.
Senator Doherty raised his point this morning, so I checked it out. The people in question would not be subject to the €200 charge. I want to be fair to Senators. If they believe that some of the points in the Bill are not as clear as they want them to be, I will go through each and every question asked to ensure they are 100% happy before we proceed. I will take as much time as is required.
As this is Committee Stage, there is no time limit.
Of course. What I want to do is——
We appreciate the offer.
We cannot take Report Stage today.
I will put it another way. If it is what the Senators want, then I can take some time to provide them with long and deliberate answers to their questions before proceeding. I will happily co-operate.
I would support the Minister's idea.
Were the Minister to agree to revert to us on Report Stage with answers to and clarifications on the queries, it might be helpful.
I would happily do so.
My question on leases raised an important issue. Will the Minister examine it for Report Stage? Leases beyond a certain time limit are generally regarded by the occupants of premises as being tantamount to freeholds. It is only for technical reasons that they do not hold those freeholds. I suggest that the Minister consider a period of 21 or 35 years so that if someone has a lease of that duration, it would fall outside the scope of the levy. From the point of view of equality in the application of the levy, it is important that this matter be considered.
Will the Minister clarify another issue for me, although I believe I am probably clear on it? Recently, I answered someone's question and, in light of this debate, I want to ensure the answer was the right one. The issue in question is the meaning of "residential property", which the Bill defines as a building situated in the State that is "used, or suitable for use" as a dwelling. A person in the farming community built a house separate from the family home. The original farmhouse, probably unoccupied and unserviced by water or sanitary facilities, which would have been normal in the old days, would not be a suitable dwelling without major refurbishment and significant expenditure. I am assuming that "suitable for use" means that the building is suitable for use in its present condition. If it is not suitable for habitation without investment in, for example, sanitary facilities, refurbishments and repairs, it does not fall within the scope of the levy. Is my understanding correct? These buildings, such as old farmhouses, are unoccupied.
I did not address the Lord Lucan issue, by the way.
On Second Stage, I raised Senator Walsh's point with the Minister. Some of the houses in question are derelict.
They might not all be derelict.
They might not be fully derelict, but it might not take much money to make them liveable accommodation. What is the position in this regard?
The explanatory memorandum states: "A ‘dwelling' is defined as a building used, or suitable for use as, a separate dwelling whether or not certain facilities are shared." This definition must be removed from the memorandum if what the Minister has stated is——
It is in the legislation.
In which case it is a contradiction. Where two families live together and irrespective of whether they share facilities, the Minister stated they would not be liable in some cases. According to the memorandum, however, they are all liable.
The Minister must clarify the issue.
That is the main point.
The Minister should clarify the question of a house that has lain idle for years and that might require much money to be put back into use, as Senator Walsh also pointed out.
Regarding a comment made by Senator Cannon, while I accept that the term "normal resident" is not contained in the legislation, section 4 states: "his or her sole or main residence". Reverting to the example of a house built by a son or daughter in a cottage garden, the old house is the main residence of the parent or parents while the new house is the main residence of the son, daughter or so on. When the parents pass on and the son, daughter or so on becomes the owner of the old residence, does that residence become liable for the charge? I believe this to be the point.
No, it is not the point. The provisions in section 4(1)(a) apply under the word “owner”.
The people would own two residences.
Correct. I could own a residence and my parents could live next door in a residence that I equally own.
I made that point.
As such, I would be liable to pay a charge of €200 per annum for their house. That is a fact. Their house is not my main residence. Rather, it is their main residence and they, unlike me, do not own it.
Is that issue not covered?
The Minister has offered to clarify many of the issues raised by Senators in good faith. We will not push the amendment on Committee Stage, but we reserve the right to resubmit it on Report Stage pending further clarification. An important matter is that of the granny flat. Even the ESB has separate meters for granny flats where they are annexes that used to be part of the original dwelling.
Senator Glynn has alluded to the issue that our amendment tries to address, albeit from a different perspective. A family farm, including the old dwelling, could be handed over to a son or daughter and he or she could build a new house on the farm, which occurs in 90% of cases. While the parent remains in the old farm dwelling, it is owned by the son or daughter. Under the legislation, it will be liable to the charge. We believe it should be exempted. Will the Minister clarify this matter? May I speak to section 2 or just to the amendment?
We are discussing the amendment.
I can revert to my next comment.
The Senator can revert under the section——
That is fair enough.
——unless his comment has to do with the amendment.
It does not. The Minister should take in good spirit the fact that we are trying to be helpful. We feel problems will come down the track if we cannot deal with these matters now. I and other Senators have tried to outline very practical and anecdotal areas where we foresee problems. We need clarity.
I will be more than happy to provide the clarification the Senator seeks. I appreciate his offer to decide on whether to table amendments for Report Stage pending the clarification he receives. However, we should distinguish between clarification and wanting to seek further exemptions, as the Senator does. I will give the Senator all the clarification he wants but it does not mean the legislation will necessarily change. It is important to bear this in mind. I want to be as co-operative as possible, not only with Senators on the Opposition side but also with those on this side who were seeking clarification. I intend to compile as comprehensive a list of answers as possible to all the points raised.
In order that we do not miss anything, I ask the Senator to go through the various points on which he seeks clarification, perhaps in the ante-room. I will obtain as comprehensive a reply as possible on all the issues and we can determine tomorrow how we can proceed. This is the fairest way to proceed and I hope it satisfies all the legitimate demands being made by the Senators.
On a point of order, based on the Minister's suggestion, with which we agree, I propose we suspend and deal with the Bill at another stage.
That is not what Senator Coffey said. His offer, which makes sense, is that the amendment not be pressed but resubmitted on Report Stage pending the clarifications I give.
The Minister has suggested that, in the meantime, we go out and take down all the points requiring clarification.
For Report Stage. Yes, that is correct.
When will the Minister return to us?
If we could finish Committee Stage now, I will obtain the clarifications for the Senators for Report Stage. That is the best way forward.
There will be many more clarifications required on Committee Stage as there are many more amendments. We will not finish Committee Stage by 5 p.m.
The Bill must be reprinted before we can proceed with Report Stage and, therefore, there will be a break between Committee Stage and Report Stage. If Committee Stage is not finished at 5 p.m., it will resume after 7 p.m. We are discussing amendment No. 3a.
Is the Minister in a position to confirm that an unoccupied farmhouse with no sanitation services and which would require a lot of money to refurbish will be outside the scope of the levy? That was my advice to a person. Under the interpretation of the——
If it is not habitable or occupied, it falls outside the scope of the levy.
While I accept where the Minister is coming from and while we will try to co-operate as much as possible on this side of the House, it seems obvious that there is a clear requirement for a Schedule of interpretations, including definitions of buildings. Could this be considered?
There are definitions given at the beginning of the legislation.
More are needed.
They need to be more comprehensive.
I thank the Minister for offering to seek clarification. During his deliberations with his officials——
The deliberations will include the Opposition.
What is the overall intent of this legislation? I do not believe it is to penalise people, predominantly those living in rural Ireland, who happen to have their elderly parents living in houses next to them. Is this what the Minister and his officials intended when they began drafting this Bill? There is a mechanism whereby we can exempt people in such circumstances from the charge. I do not believe for a moment the Minister believes we should proceed as the Bill proposes.
I would be concerned if the message went out from this session that this is an anti-elderly tax of some sort; that is not what it is. The intent is to ensure those who own second properties, who are largely reasonably well off, pay a levy.
"Largely" is the operative word. One must draft good law.
In no way can this be considered a very onerous levy. The sum of €200 is quite modest. The reason behind it, which has been applauded on the Senator's side of the House, is to find a revenue stream for local authorities. We can all agree on that.
I do not have a problem with that.
I will be very happy to accommodate Senators on the Opposition and Government sides by examining all the issues they raised. It is not just a case of my talking to my officials because I invite the various Senators who raised issues to submit to me their concerns in detail such that, by the time we reach Report Stage, they can be clarified and adequate answers can be provided. I am taking up the offer of Senator Coffey on this matter.
Will the Minister clarify whether he will be coming back before Report Stage to answer the questions asked?
Senator Coffey has made very clear that his resubmission of amendments depends on the information he receives. I suggest that we go through the various amendments tabled on Committee Stage. There seem to be some concerns. I ask the Leader of the House whether the proposals I made are in order. If not, I should be let know.
I seek information because I have just re-entered the House. This has been a very interesting debate and many colleagues are very interested in this very important legislation. Is it proposed by the Minister that we adjourn Committee Stage until 7 p.m. to allow him and Senators to discuss in the ante-room their various concerns and continue with the other two Bills listed for consideration this afternoon?
My understanding is that we deal with Committee Stage in full and that, before Report Stage, the Minister will clarify most of the points raised by the Senators.
That was my understanding.
As long as clarification will be sufficient, I am very satisfied with that.
That is what Senator Coffey has suggested.
I am very happy with that.
Senator Coffey has indicated he will re-submit some amendments for Report Stage.
I have a difficulty with that because there are major time pressures. We want to be out by midnight——
I made a point on co-operation to the Minister. Given the time constraints now being imposed by the Leader, I ask that we return to this legislation. We will have to do so next week on Report Stage.
I believed we had made some progress and that we were just about to make more by accepting the proposal made by Senator Coffey, that is, that we complete Committee Stage, after which there will be a meeting to go through the various concerns raised before we proceed to Report Stage. That was my clear understanding.
We reserve the right to resubmit the amendments for ReportStage.
Yes, that is fair enough. The Senator has that right in any case.
I have made it clear to the House that when Committee Stage is finished, the Bill must be reprinted for Report Stage if there is a separate Report Stage.
I am happy to do that.
Let me raise a point of information, because we are always learning. If there are no amendments for Report Stage, will no printing take place?
That is correct.
If there is progress involving the Minister and colleagues after Committee Stage, we can conclude the Bill by midnight or some such time. There is no guillotine. This House does not guillotine any Bill in any shape or form; that is the big advantage of being a Senator.
To clarify, we will proceed with Committee Stage. As I take it, Senator Coffey reserves the right to table amendments for Report Stage if he so wishes. There will be a break between Committee Stage and Report Stage. Is that agreed? Agreed.
Under section 2(1):
In this Act, "residential property" means a building situated in the State used, or suitable for use, as a dwelling, including any house, maisonette, flat or apartment (including a bedsit) but does not include—
(c) a building let by a Minister of the Government, a housing authority or the Health Service Executive established by the Health Act 2004.
My point applies equally to subsections (f) and (g). If the HSE engages a private landlord for emergency accommodation, will that landlord be exempt from this charge?
Does this apply also to a housing authority which has a contract with a private landlord for the rental accommodation scheme, RAS? This is a dual contract held by the local authority and the private landlord with the tenant. Will the Minister clarify whether such landlords are also exempt from the scheme?
It was clarified this morning that the owners of property in the RAS scheme are exempt. I was distracted and did not hear the Senator's other point.
I referred to the HSE in respect of emergency accommodation.
That is also exempt. If the Senator wants further clarification I can get that. I have said very clearly that these people are exempt.
I flagged this point on Second Stage this morning to give the Minister time to get further clarification if required. A terrace of privately owned houses on one side of a road might be part of RAS while the same type of house on the other side of the road, owned by the same or other landlords, might not be part of RAS. I cannot understand why those in RAS should be exempt. What is the rationale for that? They are investment properties. The only difference is that those landlords have a secure contract with the State, through the local authority, whereas those on the other side of the road have no security of contract but will be levied.
This needs to be clarified. It is an anomaly. The problems will not arise here but with the local authorities when people seek clarification. Solicitors will line up to challenge the rule. While the charge is only €200 that will be multiplied by the many thousands of houses we think will come under the scheme. There will be challenges if landlords on one side of a road are exempt because they are part of RAS while those on the other side are not. It is not fully thought through. I will be interested in the Minister's comments on that point.
I acknowledged this morning, and have just told the Senator again, that RAS is exempt. It is a fundamental part of how we accommodate people on our housing lists. It works extremely well. That is why they have got this exemption. We are not speaking now to an amendment. The Senator is seeking further information.
We are speaking on the section.
I cannot give the Senator any further information. It is an exemption and that is all there is to it.
I am speaking on the section on an area in which I see a problem. There is nothing to stop the Minister amending that section in the remaining stages. I am pointing out an area in which I see a further anomaly and inequality. The Minister cannot simply disregard all the private landlords who are not part of RAS because they have supported many of the social housing initiatives when the local authorities and the State could not support people who required housing. We will charge the ones who are not in RAS while their peers across the road, who are in the scheme, will not be charged. Those landlords have taken on the same liabilities and made the same investments as the landlords who will be charged. The only difference is that those who have security of contract with the local authority will be exempt. There will be challenges and problems in this area. It will increase pressure on local authorities because landlords will try to force themselves into RAS and there will be accusations of favouritism in local authorities where housing officers decide who can be in RAS. This is not thought through. That is the reality I foresee based on my experience of dealing with local authorities. I bring this to the Minister's attention only to be helpful. We have not tabled an amendment on this point but I suggest that the Minister consider re-drafting it in some way. That is why I suggested a schedule of exemptions where any housing officer, county manager or director of service can see who is in the scheme because it is not very clear.
I agree with Senator Coffey on this point. If I was a landlord with two similar houses, one of which was in RAS and I was charged for the one that was not, it would be an anomaly. Lawyers will drive a coach and four through the provision. It is a recipe for disaster. The Minister has spoken several times about clarity but there is no clarity on this issue. It has not been fully thought through. I respect the Minister's comment that he is prepared to try to clarify several items with us but he will not be clarifying them with us but with the solicitors and others who will examine and drive a coach and four through this legislation because it is not thought out.
I cannot understand why landlords in RAS are exempt while others not in it will pay the tax for a similar property, perhaps in the same street for which they receive the same rent. There must be some kind of legal or constitutional bar against such legislation coming in. That will be challenged. People will try to get on RAS but they will probably not be allowed to do so. One or two people on a local authority deal with RAS. We spoke earlier about the need to employ more people to collect the money but we will need more people to deal with the RAS applications.
This legislation has not been fully thought out. We have been here for only an hour or 90 minutes but look at the number of problems we have found while thinking on our feet. What will happen in the cold light of day when barristers and everybody else look for anomalies and loopholes? We can complete Committee Stage now but we need a week or two to digest this because there is much more in this Bill than meets the eye. We are only scratching its surface. We are here to tease out any anomalies and loopholes there may be in it. That is our job and we do not want to be rushed. I am not suggesting the Minister is rushing it. The Leader told us we could have it finished by midnight which is preposterous. I ask that this be teased out and that we get the clarification the Minister has mentioned, but we need a great deal of clarification because the longer we go on, the more we need. Committee Stage is where these items should be clarified and that should be done now. With all due respect to the Minister, I respect the fact he is offering to try to clarify it outside the House but it should be done here. This is where clarification should be given; this is Committee Stage of a Bill going through the Houses of the Oireachtas and we should have all the clarification we need here and now.
With respect to the Senator, this is extremely clear. The situation is spelled out exactly in sections 2(f), 2(g) and 2(h). Senator Cummins is stating that it is unfair and that a builder could have houses in the RAS scheme on one side of the road and dwellings not in the RAS scheme on the other side of the road and he feels that this is an anomaly. It is not because it has been spelled out that there is an exception being made, with an exemption for those in the RAS scheme. We already dealt with a certain exemption that the Opposition sought with regard to mobile homes. Others seek other exemptions. It is the nature of legislation that when one examines it one will look for certain areas that are exempt and other areas that are part of the legislation and that is extremely clear. It is equally clear that Senator Cummins finds it unacceptable and that is a different point.
That is not the point I was making. Everything seems to be clear to the Minister but it is not clear to this side of the House. He is speaking about providing us with clarification on a number of items. I cannot see from where he is plucking out of the air that everything is clear when he must give us clarification.
- Boyle, Dan.
- Brady, Martin.
- Butler, Larry.
- Callanan, Peter.
- Carty, John.
- Cassidy, Donie.
- Corrigan, Maria.
- Daly, Mark.
- de Búrca, Déirdre.
- Ellis, John.
- Feeney, Geraldine.
- Glynn, Camillus.
- Hanafin, John.
- Keaveney, Cecilia.
- Leyden, Terry.
- MacSharry, Marc.
- Ó Domhnaill, Brian.
- Ó Murchú, Labhrás.
- O'Brien, Francis.
- O'Donovan, Denis.
- O'Malley, Fiona.
- O'Sullivan, Ned.
- Ormonde, Ann.
- Phelan, Kieran.
- Quinn, Feargal.
- Ross, Shane.
- Walsh, Jim.
- White, Mary M.
- Wilson, Diarmuid.
- Bradford, Paul.
- Burke, Paddy.
- Buttimer, Jerry.
- Cannon, Ciaran.
- Coffey, Paudie.
- Coghlan, Paul.
- Cummins, Maurice.
- Donohoe, Paschal.
- Fitzgerald, Frances.
- McFadden, Nicky.
- Mullen, Rónán.
- O’Reilly, Joe.
- Prendergast, Phil.
- Regan, Eugene.
- Ryan, Brendan.
- Twomey, Liam.
I move amendment No. 4:
In page 5, subsection (1), line 20, to delete "relevant local authority" and substitute "Revenue Commissioners".
I move amendment No. 5:
In page 5, subsection (2), line 25, to delete "relevant local authority" and substitute "Revenue Commissioners".
I move amendment No. 6:
In page 6, subsection (7)(b), line 7, to delete “local authority concerned” and substitute “Revenue Commissioners”.
Amendments Nos. 6a and 6b are related and may be discussed together. Is that agreed? Agreed. Has Senator Cummins permission to move amendment No. 6a?
I have. I move amendment No. 6a:
In page 6, subsection (1), between lines 28 and 29, to insert the following:
"(c) in the case of a family home left vacant by a death or through its occupant(s) residing in a nursing home.”.
I await the response of the Minister.
I thank the Senators for the amendment. I have some sympathy for the purpose underlying the Senator's amendment, but I am convinced there are good reasons it would cause some practical difficulties if I accepted it. In the first instance, it is not at all clear what is meant by a "family". One can take a narrow or wide view of how this might be construed. Once owners or co-owners become entitled to possession of a property and are entitled to receive the rental income which it would generate, then the co-owners are jointly and severally liable for the change, unless they can avail of one of the exemptions in the Bill.
Until such time as probate is taken out, the new owners will not become liable for the charge. When the new owners become entitled to possession they will also be entitled to rent out the property for some or all of the time and should be able to derive a sufficient income stream to more than cover the €200 required to defray the charge. As I understand it, the property concerned is normally let when someone needs to be accommodated in a nursing home and the rental income is used to meet, in part, the costs of the care accommodation. In the circumstances, therefore, I cannot accede to the proposed amendment.
I move amendment No. 8:
In page 7, subsection (4)(a)(iii), line 14, after “granted” to insert “or separation agreement entered into”.
The Bill as it stands allows for a person to be exempt from the charge if a decree of divorce or judicial separation was granted in respect of that marriage on or before that date. Our amendment seeks to extend that provision so that if a couple has entered into a separation agreement the person would also be exempt. The separation agreement may not have gone through the courts and a legal separation may not have been yet granted. Our amendment seeks an exemption in the case of a separation agreement also. I would appreciate a comment from the Minister on whether he will consider allowing this amendment.
I thank the Senator for putting forward this amendment. Section 4 provides that where a decree of divorce or of judicial separation has been granted in respect of a marriage, a residential property in which a spouse retains an interest, but which is occupied by the other spouse as his or her sole or main residence, will not attract a liability for the charge in respect of the spouse who does not reside there. This provision is inserted to cater for the relatively common outcome of a divorce or separation agreement where one party continues to reside in the family home, but the other, although retaining a financial interest in the property, does not.
Amendment No. 8 appears to give the same status to a separation agreement as is given to a decree granted by a court. Although I have some sympathy for the objective of the amendment, I regret I cannot accede to it. The amendment does not define adequately what a separation agreement is, whether it applies in the case of a marriage or otherwise or, more generally, what standing it has in law. Neither is it clear whether either or both of the parties to the marriage had the benefit of legal advice in arriving at that agreement. It would not be known whether any element of duress was present in respect of one of the parties to the agreement when it was entered into.
The drafting of section 4(4) of the Bill is grounded in precedent. I refer the Senator to section 13 of the Finance (No. 2) Act 2000 which deals with broadly similar circumstances, but which confines itself to actual decrees of divorce and separation granted under the same statutes as referred to in section 4(4)(b). Bearing this in mind and taking account of the points I have made with regard to the uncertainty surrounding a separation agreement, I regret that I cannot accede to the amendment.
I do not have a copy of that Finance Act with me so I cannot comment on that point. I understand the Minister's argument to some degree. However, if at the time of paying the charge, a person lodged a copy of his or her separation agreement and subsequently when this was legalised returned to the local authority, would the Minister sanction a rebate for the fee paid? That would cover the issue of the legality of the agreement. Would the Minister accept that?
The Bill is very clear on this. If a person owns the property, he or she is liable for the charge. However, I will contact my colleague, the Minister for Justice, Equality and Law Reform, to advise him of the Senator's view on this matter as this branch of the law is primarily a matter for his Department to address. As I pointed out, the provision included in the Local Government (Charges) Bill follows precedent in other legislation. Depending on my colleague's advice, I would be happy to address the Senator's concerns in the future in a suitable legislative vehicle, if appropriate.
The legislation we are discussing is clear on the issue. If we are talking about the owner of the property, he or she is liable. It creates a nebulous situation where a county manager must decide on whether someone is liable for a fee on the basis of a piece of paper. I would prefer to have clarity on the issue.
I move amendment No. 8a:
In page 7, between lines 30 and 31, to insert the following subsection:
"(5) An individual who on a liability date is the owner of a residential property shall not in respect of that residential property be liable to pay the charge relating to it for that liability date if--
(a) the property in question is the only residential property owned by the individual,
(b) the individual resides, for the purposes of employment at a greater distance from the residential property that would deem it inappropriate for the individual to commute from his or her residential property to his or her place of work.”.
I thank Senators Doherty and Cummins for bringing forward this amendment. I accept the Senators' point that it would not be reasonable to require someone to pay the €200 charge where they are away working for part of the time in circumstances where the remainder of their family resides in the family home. Senator Doherty made this same point this morning. I intend to issue guidance to local authorities following the enactment of the Bill. I intend to make it very clear to local authorities that someone who is temporarily away from home for the purposes of work should, nonetheless, be able to nominate the family home as their sole or main residence. I assume the Senator has a case in mind where someone is not permanently away from the family home.
In the circumstances as outlined by Senator Doherty, liability to pay the charge should not arise. I would caution, however, that if the person concerned owned another property which he or she used to live in at their place of work, he or she cannot avail of the exemption for a sole or main residence in respect of two different properties. I clarified this issue for Senator Doherty already and I hope this further explanation provides the clarification he requires.
A late payment charge of €20 has been proposed if a fee has not been paid within a month of the due date. Will there be further penalties for late payments if the payment is further delayed. Following enactment of the Bill, when must the €200 charge be paid. If payment is made late and people have not paid up within a week or a month of the payment date, when will the late payment charge apply? What provisions have been made with regard to the timing and order regarding late payment fees and fines?
Three dates must be borne in mind. The legislation will kick in on 31 July, and on 31 September the late payment scheme will commence. If a person has not paid by 31 October, the person will be liable for the late payment fee.
This section refers to the amendments dealing with the whole area of administration and collection of charges. Fine Gael believes the Revenue Commissioners have the infrastructure, capacity and IT systems to ensure a more efficient collection of the charges than can currently be administered owing to the problems with databases and administration within the PRTB and also the lack of resources that might be available to local authorities in the current environment. For that reason, we oppose the section.
While I have a lot of respect for Senator Coffey, I am one of those who believes implicitly in the concept of local autonomy. This is clearly an area where the local authority can shine. With all due respect to the Revenue Commissioners, they are far removed from the local scene, regardless of whether we believe it.
That is not true.
The entity that is best placed to collect these charges in the most efficient way possible is the local authority. We must bear in mind that in the case of the town council, there is something in it for the nine members if it is a rating authority, and there is definitely something in it for the county council. Therefore, they will make certain this system works. The more money available to the locally elected members, the more work they can get done for the people who elected them. I would side strongly with the Minister in this regard and I commend him on devolving power to the local authority, which is best placed to collect these charges owing to its local knowledge.
I see this as the beginning of a process. It is a broadening of the revenue-raising base for local authorities. We must have a certain trust in our local authorities. There are areas where they can be criticised but I would be very surprised if they did not rise to this challenge. They will rise to the challenge and they will go out there and collect for all they worth because they want to do so. They know we are living in difficult economic circumstances, they need to get their hands on every last cent available and I have no doubt they will do it. Regardless of whether we like it, money incentivises people. I have no doubt they will do an excellent job.
It will be a test and this is, if one likes, the first test. I intend to devolve more powers to the local authorities in the context of the forthcoming White Paper. I referred earlier to the office of the Dublin mayor which will also need to have fund-raising powers. I see this as the beginning of a new era for real local government in this country. That is why I have given the task to the local authorities.
This section refers specifically to data sharing and exchange. I have outlined my concerns and those of the Fine Gael Party with this element of the Bill given that, following its enactment, the local authority will have the authority to share information and data with relevant bodies. The Bill refers to the Private Residential Tenancies Board as a relevant body. I outlined earlier my concerns and those of the joint committee with regard to the operation of the PRTB. Ultimately, it is the State body charged with the important function of registration of rental accommodation in the private sector. With the information gleaned from the members of that board and the other bodies at yesterday's meeting of the joint committee, it is clear this board is not working in the most efficient manner possible. The opposite is the case.
I seek clarification from the Minister on this point. The committee meeting yesterday was told that more than €10 million which has been accumulated from private accommodation registrations by the PRTB is sitting in a bank account waiting to be transferred to local authorities. We spoke about empowering local authorities. Local authorities are empowered and have the obligation to inspect private rented accommodation and, where standards are not kept, they have enforcement powers in that regard. If €10 million is sitting in the PRTB bank account, and the Minister might enlighten me as to how long it has been there, it is a clear breakdown in how our State bodies should operate.
Local authorities are not getting the funding that has already been allocated and collected for them. As I said earlier, four sevenths of the €70 registration charge is retained by the PRTB for its own administration and running costs and three sevenths is ring-fenced and allocated for local authorities. This is an area that needs to be examined. Under the Bill, we will depend on the information coming from agencies such as the PRTB. The breakdowns are already happening and the required efficiencies are not in place. The PRTB has been in operation for more than four years and while one would always allow for teething and functional problems to work themselves out initially, after four years one would think they would not cause barriers to the functioning of the board. Has the Minister been notified that this amount of money is sitting in a bank account? What action does he and his Department intend to take in this regard?
A more serious problem with regard to the Bill concerns the data and information collected by the PRTB with regard to private rental accommodation. Local authorities will depend greatly on the initial set-up of that database of information. The Minister said earlier the PRTB has this information but the point is that it is processing it manually. When it was first set up, the PRTB had just eight staff but this has risen to 40 and it has taken on an additional 26 staff from agencies to manually go through the registration forms because the law precludes it from using the on-line system the Minister intends to use under this Bill. The PRTB cannot use a system similar to the motor tax system, where a person can register on-line, because it needs a change in legislation to allow it to do this.
Clearly, there is a lack of efficiency and certain areas need urgent attention. My concern is that there is already a backlog of people trying to register with the PRTB, yet we are now to require local authorities to contact the PRTB and to have them transfer information from it to them, which will add to existing problems.
I was amazed to find that after four years in existence, the PRTB does not have a modern IT system to manage its registration system and database and does not have an IT system to case manage the many disputes and complaints it receives. The earliest it can deliver such a system, I am told, is mid-2010 and a strategy for this was only adopted in October 2008. Therefore, it will take two years to deliver the computer system and by the time it matches up with the local authorities' system in an effort to support this collection system, there will be more backlogs and more problems in the operations of these two arms of the State.
It is a shame we have a State body in that predicament. If the Minister is looking for efficiencies, this is one area he could certainly try to improve. It is Fine Gael policy to try to wind down the PRTB and merge it with other bodies in an effort to make it more efficient and help it address the problems it is experiencing. The PRTB is taken up in dealing with dispute resolution of private rental accommodation cases which will often apply to the people on this register. It is taking up to 18 months to resolve disputes. In its corporate plan the board set a target of between five and six months such that the time it takes is three times that estimated for resolving disputes. The people appointed to adjudicate on disputes are selected from a panel. Until recently they dealt with only one case per day but they are now being asked to deal with three cases per day. I understand they are co-operating with this request which I consider a very good thing given that they receive more than €600 per day for their services. The PRTB and the way in which it functions——
As it is now 5 p.m. I call on the Senator to report progress.
I have been asked by the Leader to clarify that No. 39, Private Members' motion 33 regarding measures aimed at reversing unemployment, should be taken at 5 p.m. and conclude not later than 7 p.m. and not at the conclusion of No. 3 as previously stated. I further call on the House to agree to an extension of 15 minutes to allow us to complete Committee Stage and push on Private Members' time by 15 minutes if it would be of assistance.
With all due respects I understand the request but I do not believe 15 minutes is enough time to complete Committee Stage. There are many important matters that Senators wish to highlight, including some I wish to highlight on Committee Stage and allowing 15 minutes will not facilitate this.
Does the Acting Leader wish to make a formal proposal?
I am trying to be helpful to Members on all sides of the House and to the Minister. The Bill must be reprinted in any case because an amendment has been accepted and Report Stage will be taken on another day.
The reprinting of the Bill is a separate matter.
Is the other side of the House not satisfied that 15 minutes is enough time to complete Committee Stage?
I intend to resubmit amendments on Report Stage in any event and I have informed the House to that effect already.
That is a separate issue.
By way of being helpful to Members——
Is Senator Coffey saying 15 minutes is not adequate to discuss the reminder of Committee Stage?
No, it is not.
Does the Acting Leader intend to make a formal proposal?
In that case Committee Stage will resume following Private Members' business.