Is that the Resolution we were discussing on Friday?
DAIL IN COMMITTEE. - SUPPLEMENTARY FINANCIAL RESOLUTIONS—REPORT.
The Dáil considered the Supplementary Financial Resolutions reported from the Committee on Finance.
Resolution No. 1 read a second time.
Yes.
With regard to the question of income tax on house property?
No, on war bonus. Resolution No. 2 deals with house property.
Question—"That the Dáil agree with the Committee in Supplementary Resolution No. 1"—put and agreed to.
Resolution No. 2 read a second time.
Can the Minister give us further information? We asked him the other day to give figures as to the effect of his proposal. He said he had not obtained them, and there was a general desire that such figures should be put forward before the proposal was adopted.
I am afraid I could not give the Deputy figures that would be of any value. I will try, before the Bill goes through, to get as good an estimate as I can, but it can only be a very rough estimate, because, as a matter of fact, the position changes from year to year, and is gradually changing to our detriment, that is, to the detriment of the Revenue. There is nothing that I can say that I could really stand over in the way of an estimate.
Could the Minister get the information from the Transfer Duty that is paid when a house passes to another person?
I am trying to get some estimate which I could put to the Dáil, but I have not got it yet.
On the last occasion that this was before the Dáil I think the Minister took us by surprise, and a little consideration of the matter does not make it any more palatable. The Minister, in explaining the provisions of the Resolution, gave us an instance where income tax payers were benefitting by the difference between the letting value of a house and the valuation. It seems to me that he is taking a very big question up piecemeal, to the detriment of a worthy class of the population, the class that own their own houses. One would have expected in the present state of affairs that so far from discouraging people from becoming owners of their own houses, the Minister would, on the contrary, have encouraged people by purchasing their own houses to spread that principle more broadly, rather than curtail the efforts of people in that direction. In fact, the whole policy adopted recently has not been in line with the Minister's proposal. It has, as a matter of fact, been rather the reverse. In other words, in connection with any building schemes which are in operation, the great incentive is to get people to buy houses, own them, and occupy them permanently for the good of the country generally and to help to solve the housing problem more rapidly than it otherwise would be solved. Now, however, the Minister comes along and says that he is going to penalise people who own their own houses.
This grant or allowance of one-sixth has been in operation for a very long time. The Minister proposes to withdraw that on grounds which I think are not sound. It is clear that a Finance Bill is not the place to open up the whole question of valuation, and it is not, in my judgment at all events, and I appeal to the House that it ought not to be, in their judgment, the proper way to deal with a big question of this sort. What it amounts to is this. The Minister says the valuation of the houses are too low, relative to their letting value. That may be so, or it may not, but at all events, on the question of valuation as it stands, the important point is really this, that the valuation, as far as houses are concerned, taking the city of Dublin, is very much more up to date than the valuation of other properties which are also liable to income tax.
All over the country there is a certain basis of valuation which, as far as I know, is unalterable, and has been in operation for a long period of years. Why should the Minister select a class of the people who really want encouragement not discouragement—that is, a class of people who buy their own houses, occupy them and keep them in repair? The allowance of one-sixth of the valuation has always been understood to be in connection with repairs, undertaken by the owners. If the Minister raises this question of the proper valuation of those houses, I submit to this House that he is dealing with a big question piecemeal, and to the detriment of people who really are not deserving of being penalised. I do not say that as regards any class of houses but we all know that this question of income tax is a very heavy one, on the country as a whole. Income tax on houses paid in accordance with the valuation is not unjust, either to the State or to the occupier. If it is unjust, the injustice is very much more broadcast, and goes very much further than where the Minister is attacking it in this Bill. I certainly rise to oppose this measure, as I think that if the Minister is out for increase in revenue he ought to do it without injustice to one section as compared to others.
I only referred very incidentally to the question of the valuation of houses in general, and the fact that the Poor Law valuation had very little relation to the real value of the houses, and that the Income Tax derived from house property in this country is very much lower than if it were collected along the lines that prevail in Great Britain. I referred to that merely incidentally. What I did wish to say was that the poor law valuation makes allowances for repairs. What I am proposing here is a reform that is long overdue, and which was not of sufficient importance to the British Government to induce them to undertake it. As a matter of fact, you have to consider the question as I put it, of two houses, side by side, of equal value. They really should pay equal income tax, provided the owners are not exempt. There is no reason why a particular house, on passing from the ownership of one person to another, should receive a deduction, due merely to a change of ownership. That is an inequality we should not perpetuate, and we should not increase by continuing the present arrangement, and have to make deductions in considerable numbers in every year on the passing of houses from the ownership of people who let them to a tenant, to the ownership of people who occupy them. There is no penalty in this at all. What simply is being done is, we are preventing people getting a deduction for which there is no call in equity, which has no relationship at all to any reality, but arises simply from the fact that provisions which were applicable in Great Britain were applied to different conditions here in Ireland without considering that they should have been normally modified. We now are dealing with the problem, and I think we should not continue to make those deductions in increasing numbers to the detriment of the revenue, that is, the general public, because if any person escapes a payment of tax somebody else has got to pay, and we should really, so far as we can, get equity in the matter.
The Minister has let fall one very important statement. I asked for the figures on Friday when this proposal was under discussion. The Minister told us then that he had not got the figures, and he has told us to-day he is endeavouring to get figures, but he has not got them. He has told us the British Government did not consider that the savings that would be effected by this alteration were worth while. Consequently they did not take the step the Minister for Finance here proposes to take. That is exactly what I had in my mind when I asked the question on Friday—that the saving that would be effected, or at least the income that will accrue from this proposal will be so small compared with the irritation it will cause amongst householders that the Minister would have been well advised to have considered the matter from that point of view before introducing this Resolution.
As has been pointed out by Deputy Hewat, if the basis of valuation in this country requires alteration—I am not quite sure that it does—but if the point of view be that the basis of valuation is not as up-to-date as it might be, there are other means of putting that right. To bring in, under the cloak of a Finance Bill, a change in a system of valuation is, I think, hardly warranted. We would scarcely be warranted in following the Minister into a discussion on the question of valuation under this particular proposal. But he has expressed the view that Poor Law Valuation does not fairly represent the profit rental accruing from a property. Before making that statement I hope the Minister has made inquiries into the matter. My view is that the Poor Law Valuation in most cases very fairly represents the profit rental of a property. Of course there are old valuations that have been in existence for a number of years, but they are a comparatively small numbed. In these cases the Minister might fairly allege that the valuation does not represent the profit rental which would be subject to income tax. But the modern valuations put quite a different complexion on that proposal, and if he were to take a number of modern valuations I think he would find that by taking the poor law valuation as the basis for income tax he would get a larger return than he would on the basis of profit rental. So that if he is going on that assumption I am afraid that he will find on investigation that the assumption is not well based. Therefore, I would like, before this particular proposal is allowed to pass on any further, that we should have more information at our disposal than we have.
Question put.
The Dáil divided: Tá, 46; Níl, 10.
Tá
- Pádraig F. Baxter.
- Earnán de Blaghd.
- Seán Buitléir.
- Louis J. D'Alton.
- Máighréad Ní Choileáin Bean Uí Dhrisceóil.
- Desmond Fitzgerald.
- John Hennigan.
- Liam T. Mac Cosgair.
- Maolmhuire Mac Eochadha.
- Tomás Mac Eoin.
- Pádraig Mac Fhlannchadha.
- Patrick McGilligan.
- Risteárd Mac Liam.
- Eoin Mac Néill.
- Seoirse Mac Niocaill.
- Liam Mac Sioghaird.
- Liam Mag Aonghusa.
- Martin M. Nally.
- Tomás de Nógla.
- John T. Nolan.
- Peadar O hAodha.
- Mícheál O hAonghusa.
- Criostóir O Broin.
- Seán O Bruadair.
- Tomás O Conaill.
- Richard O'Connell.
- Séamus O Cruadhlaoich.
- Aodh O Cúlacháin. Liam O Daimhín.
- Eoghan O Dochartaigh.
- Séamus O Dóláin.
- Eamon O Dubhghaill.
- Peadar S. O Dubhghaill.
- Pádraig O Dubhthaigh.
- Eamon S. O Dúgáin.
- Donchadh S. O Guaire.
- Mícheál O hIfearnáin.
- Séamus O Leadáin.
- Fionán O Loingsigh.
- Pádraic O Máille.
- Domhnall O Mocháin.
- Séamus O Murchadha.
- Pádraig O hOgáin (An Clár).
- Pádraig O hOgáin (Gaillimh).
- Caoimhghín O hUigín.
- Patrick W. Shaw.
Níl
- Earnán Altún.
- Bryan R. Cooper.
- Sir James Craig.
- Osmond Grattan Esmonde.
- Darrell Figgis.
- John Good.
- William Hewat.
- Connor Hogan.
- Séamus Mac Cosgair
- Ailfrid O Broin.
Question declared carried.
It would be desirable that Deputies who intend to vote on a Division should be present in the House after the second bell is rung, as Divisions take a very long time under the system by which Deputies fail to attend.