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Paschal Donohoe told the Oireachtas committee this afternoon that houses damaged by mica will be exempt from local property tax (LPT) for six years.
The Minister of Finance is answering questions from TD and Senators about the government's reform of LPT in the Joint Committee on Finance, Public Expenditure and Reform and Taoism.
The committee is conducting a pre-legislative review of the 2021 Fiscal (Local Property Tax) (Amendment) Bill. Donohue said the bill will be enacted before Congress rises due to the summer recess.
If passed, the legislation will expand the scope of the existing LPT by 75% in response to the surge in housing prices since the introduction of the tax in 2013.
In response to a question from Sinn Fein Financial Spokesperson Pearse Doherty, Minister Donohue confirmed that the affected houses will be exempt from LPT for six years.
In Donegal alone, about 1,000 houses were damaged by the presence of muscovite in the building blocks, reducing the strength of the concrete used to make them.
According to Housing Minister Darragh O'Brien, overall, Donegal, Mayo, Sligo and Clare estimate that between 4,000 and 5,000 houses have been damaged, but the number may double in the end.
A remedial plan is currently in place, but activists are not satisfied with its terms, and the government is currently negotiating the matter.
Today, Minister Donohue stated that he is “very aware of the great anxiety caused by the mica scandal”.
When asked by Donegal TD how the house is eligible for the exemption or whether the homeowner needs to pay the fees reported by the engineer, Donohue explained that the exemption will be given to properties that meet the conditions of the remediation plan, which are “will or are being repaired” ".
Minister Donohue also stated that the LPT Balanced Fund will be paid to local authorities from the national treasury in the future.
Under the current system, 80% of the funds collected by local authorities from LPT are reserved for funding expenditures, while 20% goes to equilibrium funds.
Local authorities with a property tax base smaller than elsewhere will then obtain funding from the fund to eliminate inequality in funding between parliaments.
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However, Doherty stated that, according to the government's current proposal, local authorities will retain 100% of LPT revenue, "therefore there will be no equilibrium fund."
Donohue stated that the balanced fund system was not included in the original local property tax bill of 2012, nor was it included in the new local property tax bill.
"This is another matter for the Ministry of Housing," he said.
However, the minister added that he "committed" to maintain the "equalization approach" by covering any shortfalls with state treasury funds.
He said: "The target is to be implemented over a two-year period, starting from the local authority budget period in 2023 and then to 2024."
"I will work with Minister O'Brien to study how this will work, but my intention is that no local authority, no county will be made worse by this change."
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Paschal Donohoe stated that houses damaged by mica will be exempt from local property tax for 6 years
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