FINE GAEL environment spokesman Phil Hogan challenged the Government’s claim that the €200 charge on second homes would yield €40 million annually. Mr Hogan claimed that it had no hope of raising that amount this year.

“To begin with, we do not know the extent of the information that is available at local government level and we are relying on the Private Residential Tenancies Board, the Revenue Commissioners and the ESB,” he added.

Mr Hogan said he did not accept that the local government system would be up and running as quickly as the Government anticipated in order to collect that amount of money in the current year.

Minister of State for the Environment Michael Finneran insisted, however, that the yield could be even higher. He said that census and other data suggested that there might be 400,000 properties in the State liable for the charge.

“The annual potential yield could, therefore, be higher than estimated at present,” he added.

“However, like any new taxation measure, knowledge of the actual yield will only come with experience of its operation in practice.” Mr Finneran said that given the data sources available, it was likely that, initially at least, collection levels from rental properties, of which there were about 200,000, might be higher than from holiday homes and vacant residential properties.

Mr Finneran said that the amount raised would more than ameliorate the impact of the reduction of €30 million in general purpose grants.

Introducing the Local Government (Charges) Bill, Mr Finneran said that it gave effect to the Government’s budgetary decision to introduce the annual charge on non-principal private residences.

Liability for the €200 would fall, in the main, on owners of rental, holiday and vacant properties. “This will broaden the revenue base of local authorities,” said Mr Finneran.

“The proceeds of the charge will be paid to, and retained by, local authorities and it will take effect in 2009 and continue to apply in subsequent years . . . It is a new type of revenue stream that will generate a stable yield and will not be subject to the volatility associated with the transaction based property taxes,” he added.