TAOISEACH Enda Kenny has given the first official commitment that 65pc of property tax revenue will be ring-fenced for the areas it is collected in.
But it means that more than one-third of the revenue will be shared out around the country to pay for cash-strapped rural councils, which is likely to spark anger among urban homeowners paying higher property taxes.
Mr Kenny dismissed complaints from Dublin-based government backbenchers that their constituents would be paying too much property tax to subsidise council services in other parts of the country.
"No, I don't accept that it's an unfair tax. It's fair in the sense that those with more, pay more, particularly those with houses over €1m," he said.
He said the expert group on the property tax had not recommended giving an exemption for those had paid heavy stamp duty during the boom – but pointed out this group had been granted extra mortgage interest relief by the Government.
And he denied that the property tax would result in homeowners being asked for money they did not have.
"This is an alternative to increasing income tax, which is a tax on jobs," he told RTE's 'Week in Politics'.
But Fianna Fail TD Sean Fleming said the Government could have avoided the requirement in the bailout programme to bring in a property tax by negotiating an alternative with the troika. Sinn Fein TD Peadar Toibin said the property tax would hit people in mortgage distress who could not afford to pay it.
He said the method of repaying the Anglo debt, through annual promissory note instalments of €3.1bn, was "patently unfair". But he refused to say if the Government was going to get a write-down of the debt from the ECB or a reduction in the interest rate.