I beg to move the following resolution:—
Where tax under Schedule A is charged in respect of a house or building or part of a house or building the annual value of which is ascertained according to the respective surveys and valuations from time to time in force for the purposes of poor rates, no allowances or deductions shall be made under paragraph (b) of sub-rule (1) of Rule 7 of No. V. of Schedule A of the Income Tax Act, 1918, or under Section 24 of the Finance Act, 1922, unless it is proved to the satisfaction of the special commissioners that the whole of the property in respect of which the tax is charged (in so far as it is not vacant) is bona fide let by the landlord or immediate lessor and that he has undertaken to bear the whole cost of repairs thereon.
It is hereby declared that it is expedient in the public interest that this resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913.
The object of this proposal is to remove an anomaly which exists in this country in regard to income tax on houses. It does not exist in England because there is a different system of valuation there but the effect of the law as it stands in this country is that where, say, a man in Dublin is a tenant of a house at £120 per annum the schedule assessment is £45, if the Poor Law valuation is £45, and the income tax at five shillings in the £ is £11 5s. If, however, the same individual purchased the house and remained in occupation as owner an allowance is given of one-sixth which is supposed to be for repairs, although there is of course an allowance for repairs in the poor law valuation on which the assessment is based. The result is that the tax in Schedule A is £37 10s. instead of £45 and the amount payable, instead of £11 5s., is £9 7s. 6d. That means that on the same house which is exactly of the same value there is this year a tax of £11 5s., but next year, because the house passes into the hands of a different owner, there will only be payable £9 7s. 6d. The thing is anomalous. There is absolutely no reason for it. It is unjust that on two houses, exactly identical in every particular, two different amounts of income tax have to be paid. The matter is of some importance financially as well as from the point of view of equity, in view of the way in which houses which formerly were let to tenants are now being purchased and occupied by the owners, owing to the housing shortage. Every day we find that allowances have to be made which were not previously made and the amount of the tax is reduced. The matter arises out of the conditions in Great Britain where the poor law valuation is not the basis of income tax, where there is a special valuation for income tax purposes and where the valuation is the full rental value of the house. As a matter of fact, in the sort of instance which I have indicated, in Great Britain the income tax would not be paid on the £45 which is the poor law valuation but on £120 less an allowance of one-sixth for repairs. This particular allowance affects only residences and shops. It affects urban houses only. It does not affect farmhouses or buildings on land which come under a different heading and which have not this allowance but another one.
