Dáil Éireann Debate, Tuesday - 12 February 2013
219. Deputy Patrick O'Donovan asked the Minister for Finance if he will outline the agreement between the previous Government and the Troika in relation to property tax under the Memorandum of Understanding; and if he will make a statement on the matter. [6638/13]
View answerThe EU-IMF Programme of Financial Support is subject to policy conditionality which is set out in programme documents - the Memorandum of Understanding on Specific Economic Policy Conditionality (MOU), the Memorandum of Economic and Financial Policies (MEFP) and the Technical Memorandum of Understanding. The conditionality in these documents is subject to continuing assessment by the Irish Authorities and the EU, IMF, ECB (the Troika) to ensure the board programme objectives are met. Such assessment is undertaken at the quarterly reviews. These reviews include discussions where programme commitments are updated and agreed after every mission. The introduction of a property tax has been a condition of the Programme since it was first negotiated in November 2010, and has remained a condition following subsequent reviews. In relation to the programme documents dated December 2010 the MEFP made reference to the introduction of a new residential-property based site value tax while the MOU, referred to the introduction of a property tax. Since then, in both the MOU and MEFP, the reference of the property tax has developed as the programme documents have been agreed after each review mission. The most recent references in the programme documents has been to a value-based property tax. All the programme documents referred to are available on the department website.
In light of the complex issues involved in a full property tax, the Government decided to introduce the Household Charge, a flat charge of €100, in 2012 as an interim measure. The Household Charge was a matter for the Minister for the Environment, Community and Local Government and has been abolished with effect from the 1 January 2013.
The Finance (Local Property Tax) Act 2012 was signed into law by the President on 26 December 2012. Under this legislation a local property tax charge will be payable on all relevant residential properties from 1 July 2013.
The Government decided that that the basis of assessment for the Local Property Tax should be market value, as recommended by the inter-Departmental Group chaired by Dr Don Thornhill (the “Thornhill Group”), which considered the structures and modalities of a property tax. I refer the Deputy to my answer to Question No. 127 of 18 December 2012 (56634/12) for more details on the group’s analysis, and to the report itself, which is available on the website of the Department of the Environment, Community and Local Government.
