I move amendment No. 3: In page 3, between lines 23 and 24, to insert the following: “Report into differential rates for owners of multiple properties 3. The Minister shall within six months from the passing of this Act prepare and lay before Dáil Eireann a report on the potential introduction of differential rates of local property tax on residential properties under this Act and the Principal Act where such properties are owned by persons who: (a) own two or less residential properties; (b) own more than two but less than 20 residential properties; (c) own more than twenty but less than 50 residential properties; (d) own more than fifty but less than 100 residential properties; (e) own more than one hundred but less than 1,000 residential properties; (f) own more than 1,000 residential properties.”. This amendment is about broadening and diversifying the tax base but also supporting local government and local democracy. The delivery of public services at a local level requires good, solid funding streams. That has always been the position of the Social Democrats. It has never changed and it will not change. We cannot have strong local government and strong public services without having mechanisms and streams for financing them. Ireland has one of the most strongly centralised forms of government in the western world, with the least power devolved to local authorities. We often talk in this House about the weakness of public services and how they can be improved and strengthened. One of the best ways of strengthening public services is through empowering local government, and that cannot be done without strong financing streams. The OECD's organisational autonomy country ranking chart has Ireland at third from the bottom, with only Malta and Belarus performing worse than us among OECD countries. There is no doubt this ranking is linked to issues around how we finance local government. It is a key factor. If we want better public services delivered at a local level, including affordable, high-quality childcare, improvements in housing and myriad other services, changes are best made at local government level. I make that overall point in case anyone in the Chamber or watching the debate is in any doubt whatsoever about our position. The amendment seeks a report within six months of the passing of the Act on the potential for broadening the tax base by increasing the local property tax for owners of multiple properties. We are talking about landlords, including institutional landlords, who own a large number of properties. The rationale behind the amendment is that there is a difference between people who are paying local property tax on their home and those paying it on multiple properties they own for investment purposes. There is a strong rationale for considering higher rates for those who own multiple properties as investments. The amendment is just asking the Minister to provide a report on the potential introduction of differential rates. It at least merits consideration. Earlier, the Minister referenced, in defence of his arguments, the report of the Commission on Taxation and Welfare. My amendment simply proposes that he provide a report that would look in detail into a recommendation of the commission. There is no point in the commission making a lot of recommendations if we in this House do not look to see whether we can implement them. It is important not just to defend income streams for local authorities but also to look at how they can be broadened in equitable ways that do not place the burden on lower income households and ordinary homeowners. This proposal seeks to do that. I ask the Government to strongly consider it.

Sentiment score: 0.07

I thank the Minister for explaining to me the difference between a parliamentary question and an amendment to legislation. I understand the difference but I thank him very much for his generous explanation. This amendment is not a parliamentary question. I am not solely seeking the information the Minister outlined. I am seeking a report on the potential introduction of rate changes in line with the recommendation from the Commission on Taxation and Welfare. The purpose of the amendment is to give the Minister time and space, namely, six months, to consider whether he wants to back the introduction of differential rates. I appreciate his providing the statistical information but the purpose of my amendment is not simply to get that information but, rather, to obtain a broader report on whether he would want to make the proposed changes, and to give him six months to consider it. I thank the Minister for giving his rationale as to why he does not want to make the change I am proposing, which is that he does not want to introduce something that might broaden the tax base because of the potential volatility it might cause in that income stream. Does that explanation mean he will now look at the entire tax code and, everywhere there is potential volatility, he will seek to remove it? Unfortunately, there is potential volatility across all the different income streams within the tax code. That can happen across the board. At the budgetary oversight committee yesterday, we discussed the massive potential volatility in respect of corporation tax receipts, which is much greater than ever will be the case in terms of what I am proposing here. With respect, I do not accept his argument as a good rationale for not broadening the tax base or at least considering it, as recommended by the Commission on Taxation and Welfare. Volatility is in the nature of taxation and expenditure. The Minister understands that very well in his current role.

Sentiment score: 0.23

I thank the Minister for being helpful. I assure him that there was absolutely nothing in his tone that caused any offence whatsoever. I am very grateful for the clarification. I am also grateful to the Minister for being very helpful in making my case for me in his response. The exact point that he has made is that there is less volatility in taxation on fixed property than in other forms of taxation or income streams. While there could be some volatility with regard to changes or multiple ownerships, the Minister is absolutely correct when he says there is much less volatility in income streams and revenues that arise from property. That makes the case for my amendment even stronger. This should be considered because the Minister is right. Regardless of how they are constructed, there is far less volatility in property taxes than in other forms of taxation. The amount of property in the country is increasing all the time. We are building more homes and more properties and the population is increasing. The Minister is right that there is not the same sort of volatility you could have with corporation tax, VAT and most other forms of taxation. I thank the Minister because he has made my case stronger. I will press the amendment because we do need a report on this.

Sentiment score: 0.21

I thank the Minister for getting to his feet to make arguments to support what I am putting forward for a second time. I thank him very much for that. Will he now accept the amendment?

Sentiment score: 0.37

I move amendment No. 5: In page 4, between lines 21 and 22, to insert the following: “Insertion of new section 10E into Act of 2012 5. The Act of 2012 is amended by the insertion of the following new section after section 10D: “10E. A residential property that is in an area that has yet to be taken in charge by a local authority shall have a 50 per cent reduction applied to its local property tax liability.”.”. This amendment is connected to the issue of taking in charge in what are sometimes newer developments or newer estates but, given how slow the process is, are not always newer. It should be a relatively simple and straightforward process. In other countries it does not lead into months, years and decades. In fact, in a lot of other equivalent European countries the equivalent of a taking-in-charge process is completed at the end of the construction of a development within the time of the planning permission. In Ireland, after the development is built, the roads and the public areas are often not handed over to the local authority or taken in charge for decades. This causes huge issues in terms of maintenance, with the maintenance maybe not being done properly or maybe the cost of it being borne by the residents. There are therefore situations where the residents are paying local property tax for maintenance of their public areas and local facilities but are not getting any of that money spent in their local area because it is not taken in charge. Effectively, they are subsidising areas where the facilities are taken in charge. There are no timelines in legislation on taking in charge these areas. This is something I tried to insert into the Planning and Development Bill that went through the previous Dáil but the Government voted it down. There are no financial incentives for a local authority to take in charge a public area. In fact, there is a financial disincentive, effectively, because it gets 100% of the local property tax that is collected for that area and when it takes it in charge, the process of taking it in charge can be costly for the local authority and the maintenance thereafter is an additional cost. There is therefore actually a financial disincentive for local authorities to do this in a timely manner or quickly. That is one of the reasons this goes on for decades, not just years. It is often the case, as I am sure the Minister is aware, that when a development is built, couples might move in without children, the area is not taken in charge, the children are born, they go into childcare, preschool, primary school, secondary school and college, they stay at home after college because they cannot find somewhere to rent and then they leave in their mid-20s or late 20s and the area still has not been taken in charge by the local authority, which is something no one would have thought of at the start. There needs to be, in the local property tax, strong financial incentives for local authorities to take these areas in charge. This needs to be addressed. It has not been addressed in the planning legislation. This is an opportunity to address it so I hope the Minister will take this on board. There is a financial equity issue or a fairness issue here for people who are paying significant management fees. That can be for duplexes or houses where there is really no case for an ongoing payment of management fees. The residents can be paying significant management fees because the areas are not taken in charge and, at the same time, they are paying the full local property tax. I would like serious consideration of this amendment because this issue is unfair and needs to be addressed.

Sentiment score: 0.08

I thank the Minister for his response. I get the overall rationale in terms of not wanting to have an endless list of exemptions because, of course, that would undermine this funding stream. I am not looking for an exemption. What this amendment proposes is a 50% reduction, in the full acknowledgment that in an area where an estate or a development has been built and is not yet taken in charge there is absolutely a benefit to the people living there in terms of the investment from the local authority in the wider infrastructure and the wider community, including libraries, regional parks and the wider road network. That is acknowledged by my amendment in referring to 50% because about 50% should go to fund that. About 50%, though, is on the maintenance of one's local roads, local footpaths, pocket parks and so forth. There are areas that are not taken in charge where, on the roads that are not taken in charge, gardaí cannot enforce the road traffic legislation. There may be road markings and so forth but the gardaí do not have legal instruments to enforce the legislation. They can ask people to co-operate in common sense and so forth but they cannot actually enforce the legislation, and this goes on for decades. It can happen outside schools that are built with newer developments. There are issues where local authorities at times will not put in place school traffic wardens on roads or footpaths that are not taken in charge, which creates very real issues in terms of the safety of children. It is totally unfair that children do not get a school traffic warden outside their school, a school funded and built by the State with public money, because these areas are not taken in charge. It is not the fault of the child or their family that this can take decades. I accept that there is a case for a contribution, and that is what this amendment seeks to do. If the Minister were to say to me that he thinks 50:50 is incorrect and that 60:40 would be preferable, or that he will look at this seriously, of course I would entertain that, but there is no acknowledgment from what the Minister says that there is an injustice here in terms of a full contribution being made, including for services that are not being provided within the area where people are living. If this is not done, how do we create an incentive for local authorities to take areas in charge? They lose money when they take an area in charge. They take on more work and more outlay rather than there being an incentive. Surely the funding streams should try to incentivise the right behaviour from a local authority. To put it another way, a local authority that is proactive on this is getting penalised, whereas local authorities that are not as proactive in taking areas in charge are not being penalised, in effect. As the Minister can appreciate, having good financial incentives for the best behaviour and outcomes for communities and local services is a good way to approach solving these problems.

Sentiment score: 0.15

A key function of the local property tax is not simply to collect revenue, but to fund local services. That has been clear from the outset. If the point is to fund local services but people do not get those services where they live because the local authority has not taken their area in charge, then of course there is a strong rationale for the way the local property tax is designed to reflect that. The intention of this amendment is not to create a significant tier of housing that is subject to this reduced rate for a prolonged period. It is to ensure there is not a tier of housing that is not taken in charge for a prolonged period and that there is a strong incentive for local authorities to get on with the business of taking those areas in charge, not leaving communities in limbo for ten or 30 years. I am aware of areas that have been looking to be taken in charge for longer than I have been alive.

Sentiment score: 0.32

That would be telling. People move in and think it might be a year or two. There is a lot of frustration at local meetings in my constituency that I have attended. People moved in when they had no children and their children are now getting to the stage where they will be moving out soon and there has been no progress. This has to be tackled.

Sentiment score: -0.13