Property tax €3.6m error blamed on rushed law

The “farcical” way the local property tax was passed through the Oireachtas has been blamed for a blunder that will see Revenue having to repay €3.6m to 6,000 homeowners.

Revenue will begin the process of matching payment records to stamp duty returns in an effort to identify home buyers who paid the tax but were not obliged to under the exact wording of the legislation.

It said in a statement at the weekend that a clause in the legislation was originally intended to give an exemption until 2016 to first-time buyers who purchased a second-hand home up to Dec 31 this year.

“However, read literally, the exemption benefits any buyer, not just a first-time buyer,” Revenue said.

Fianna Fáil’s finance spokesman Michael McGrath said this was “a direct result of the flawed legislative process which resulted in the relevant section not even being debated in the Dáil”.

Section 8 of the Finance (Local Property Tax) Act 2012 dealt with the exemption, which Revenue believes refers to all buyers and not just first-time home buyers — even though this was not the Government’s original intention.

Mr McGrath said the committee stage of the bill, which deals with legislation section by section, was “one of the most farcical parliamentary experiences I have had since being elected.”

The Cork South Central TD said just two of the 159 sections in the bill were discussed in the debate which took place on Dec 18, 2012. “So anxious was the Government to ram the bill through before Christmas that the committee stage was forced through in a matter of hours,” he said.

Mr McGrath said the Government should also take “full responsibility” for the fact those who wish to pay their 2014 property tax by debit or credit card, have to do so later this month.

He also called for clarity on whether anyone who buys a second-hand home between now and the end of the year — whether they are a first-time buyer or not — will be exempt from the property tax until 2016.

There is also growing concern in the Cabinet over a decision to use the property tax receipts for 2014 to fund the establishment of the new Irish Water agency, instead of putting it directly towards local councils.

TDs and councillors in Dublin — where 80% of revenue was to fund local authorities next year — are particularly angry about the U-turn.

Meanwhile, Justice Minister Alan Shatter said a decision on whether the Government would exit the bailout without a financial backstop would be made by the Cabinet before Dec 15.


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