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Mica protestors outside the Convention Centre in Dublin last month Sasko Lazarov

Houses damaged by mica will be exempt from Local Property Tax for six years, says Paschal Donohoe

No local authority will be worse off as a result of changes to the tax, Donohoe said.

HOMES DAMAGED BY mica will be exempt from the Local Property Tax (LPT) for a period of six years, Paschal Donohoe has told an Oireachtas committee this afternoon.

The Minister for Finance was answering questions from TDs and senators about the government’s overhaul of the LPT at the Joint Oireachtas Committee on Finance, Public Expenditure and Reform and Taoiseach.

The committee is conducting pre-legislative scrutiny of the Finance (Local Property Tax) (Amendment) Bill 2021, which Donohoe said will be enacted before the Dáil rises for the summer recess.

If passed, the legislation will widen the existing LPT bands by 75% to account for the surge in house prices since the tax was introduced in 2013.

In response to a question from Sinn Féin finance spokesperson Pearse Doherty, Minister Donohoe confirmed that affected homes will be exempt from the LPT for six years.

Approximately 1,000 homes in Donegal alone have been damaged by the presence of muscovite mica in building blocks, reducing the strength of concrete used to make them. 

Overall, an estimated 4,000-5,000 houses in Donegal, Mayo, Sligo and Clare have been damaged although the final figure could be double that, according to Minister for Housing Darragh O’Brien.

A redress scheme is currently in place but campaigners are unhappy with its terms and the government is currently conducting a consultation on the matter.

Today, Minister Donohoe said he was “very much aware of the massive anxiety” caused by the mica scandal.

Asked by the Donegal TD how houses would qualify for the exemption or if homeowners will be required to pay for an engineers’ report, Donohoe explained that the exemption will be given to properties eligible for the redress scheme that “will be or is currently being remediated”.

Equalisation fund

Minister Donohoe also said the LPT equalisation fund will in future be paid out to local authorities from the exchequer.

Under the current system, 80% of the money collected by a local authority from LPT is retained to fund spending while 20% goes into the equalisation fund.

Local authorities with smaller property tax bases than others are then allocated money from the fund, an effort to smooth out funding inequalities between councils.

However, Doherty said that under the government’s current proposals, local authorities will retain 100% of the LPT receipts “so therefore there wouldn’t be an equalisation fund”.

Donohoe said that the equalisation fund system was not contained within the original Local Property Tax Act of 2012 nor is it included in the new Local Property Tax Bill.

“It’s a separate matter for the Department of Housing,” he said.

However, the minister added that he has a “commitment” to maintaining “the equalisation approach” by making up any shortfalls through exchequer funding.

“The objective is to put that in place over the two year periods, commencing with the local authority budgetary periods in 2023, and then into 2024,” he said.

“I will work out how that will operate with Minister O’Brien but it is my intention is that no local authority, no county will be worse off as a result of this change.”    

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    Mute Anthony Keenan
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    Jul 7th 2021, 3:56 PM

    Genuine question here – why are we talking about a 100% redress from the Governemnt? I really do feel sorry for the people and families affected, but thousands of people also lost a significant amount of money on their homes during the crash and there was no compensation. Different situation but the logic is the same no? Again, I think they should definitely get some sort of redress from the companies and insurance, but just struggling to see why they feel the Government (and taxpayers) should be the ones to bail them out?

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    Mute Colin McNamara
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    Jul 7th 2021, 3:58 PM

    @Anthony Keenan: people who’s houses lost value due to the crash and people who are actually losing their houses are not the same at all

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    Mute Anthony Keenan
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    Jul 7th 2021, 3:59 PM

    @Anthony Keenan: it would also open the debate last about cowboy builders – should the government (and taxpayer) then be responsible for all the situations involving cowboy builders or where there’s other issues with properties? Or where (and who) draws the line?

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    Mute Colin McNamara
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    Jul 7th 2021, 4:03 PM

    @Anthony Keenan: and nothing to do with builders either. It’s the quarries that supplied the blocks. And these quarries got licences off, you guessed it, the government.

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    Mute Bala mc blaha
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    Jul 7th 2021, 4:08 PM

    @Anthony Keenan: because our over paid TD’s took their eye off the ball. Ask yourself why are our TD’s awarding themselves big fat salaries? If our overpaid peacocks did their job we would not have this problem.

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    Mute Sean
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    Jul 7th 2021, 4:09 PM

    @Anthony Keenan: These people are taxpayers and voters, it is no different in principle to compensation offered to victims of flooding or the €64bn bailout of private banks – the mica bailout will be a lot cheaper you will be glad to hear. The UK government has put a €3.5bn scheme in place to replace dangerous cladding on high rise buildings after the Grenfell disaster. So lots of example out there if you look for them. But it’s not just the Government being generous. They have skin in the game. The Government look after the construction products regulatory regime or at least they were supposed to be doing that. This was a regulatory failure to apply standards and to ensure that these were met through spot inspections. Mica in blocks is a known issue in Ireland dating back to the 1940s.

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    Mute Nora McElhinney
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    Jul 7th 2021, 4:33 PM

    @Anthony Keenan: maybe because of the government’s “light touch” regulation? These people have all but lost their most valuable assets – where do you think the cost of lengthy legal battles will come from and where will they live in the meantime? The government can chase the cowboys and insurance companies after….

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    Mute John Buckley
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    Jul 7th 2021, 5:21 PM

    @Colin McNamara: it has nothing to do with the government and certainly has nothing to do with licencing. There is a SI in place since 1949 stating that the aggregate used in concrete can only have 1% of these foreign particles. These blocks have up to 14% mica. The manufacturers are totally at fault. I think they actually carried out the tests required but ignored the results knowing they were supplying faulty products

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    Mute Trevor Donoghue
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    Jul 7th 2021, 9:57 PM

    @Anthony Keenan: Because many of the homes require complete demolition and new rebuild.

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    Mute Maalouf
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    Jul 7th 2021, 4:02 PM

    4 years for that lad. Judge Nolan strikes again

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    Mute Alan Wright
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    Jul 7th 2021, 4:10 PM

    @Maalouf: Judge Nolan is almost as much of a menace to society as the criminals he sentences are. And why are the comments closed on that article, the case is closed?

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    Mute Jason Ebbs
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    Jul 7th 2021, 5:37 PM

    @Alan Wright: it’s closed because the journal won’t have anything bad said about “Judge” Nolan. Reading the heading was enough to tell me it was Judge Nolan before I even read the article. He’s an absolute disgrace.

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    Mute páraicS
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    Jul 7th 2021, 7:09 PM

    @Jason Ebbs: And no previous convictions in this jurisdiction speaks volumes

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    Mute Michael Mcshane
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    Jul 7th 2021, 11:09 PM

    @Maalouf: he’ll be out in 3, absolute disgraceful sentencing. you’d swear that women had no rights in this great republic when you see this happening..shambolic

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    Mute Colette Kearns
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    Jul 7th 2021, 4:29 PM

    If I owned one of those houses I would never pay a penny in property taxes, they could take the pile of rubble when I die! The bloody cheek of the government trying to get property tax.

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    Mute Nora McElhinney
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    Jul 7th 2021, 4:13 PM

    Nothing short of 100% redress is acceptable – Paschal should take his measly crumbs and ram them….. echoes of Marie Antoinette’s “let them eat cake”!

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    Mute Arch Angel
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    Jul 7th 2021, 4:48 PM

    @Nora McElhinney: Houses. What houses? From what I’ve seen, in another few years they’ll be piles of rubble. This is just a distraction.

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    Mute Geoff Bateman
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    Jul 7th 2021, 3:58 PM

    and a lot of good that will be to the ownersThey need hard cash to put it right

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    Mute Declan Moran
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    Jul 7th 2021, 5:26 PM

    Is this the best they can offer these people ? They need 100% and need it now.

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    Mute Patrick Kennedy
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    Jul 7th 2021, 5:51 PM

    1,000 affected homes in Donegal is a very conservative estimate, multiply by 5 or 6.

    To the people who are arguing that homeowners should foot some if the bill I’d ask how they’d feel if the body of their car starting to fall apart due to rainfall after a couple if years or if a doctor decided to dilute their blood transfusion with Fanta to make it go further.

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    Mute Glenn Halpin
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    Jul 7th 2021, 6:23 PM

    @Patrick Kennedy: redress for those faulty vehicles wouldn’t come from the taxpayers though in your comparison surely… it would come from the private organisation or else insurance?

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    Mute Patrick Kennedy
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    Jul 7th 2021, 6:43 PM

    @Glenn Halpin: You would think but the Govt have let the private organisation off the hook by not having adequate building regulations in place.

    Additionally the Govt set a precedent by providing 100% redress for pyrite impacted homes in the Dublin region.

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    Mute Limited Edition
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    Jul 7th 2021, 6:17 PM

    Sort these families out. Make it right. No excuses.

    I’ve no problem in paying taxes for these people caught in a terrible place. I do however have a problem with lenient sentences but that’s for another __closed__ story.

    This could have happened to any one of us – our brothers, sisters, aunties, uncles, mothers, fathers… don’t be an a$$hole with an opposing view – it’s only right.

    The right thing to do and the hard thing to do are often the same thing. (The Weatherman quote).

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    Mute Football in the Groin
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    Jul 7th 2021, 4:38 PM

    Problem solved!

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