Finance (Local Property Tax) (Amendment) Bill 2013

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

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

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

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

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

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

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

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

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

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