I move amendment No. 1:
In page 5, line 13, to delete "This Act shall come into operation" and substitute "This Act, other than Part 7, shall come into operation".
Amendments Nos. 1 and 8 to 21, inclusive, are grouped together and are required to extend the mortgage interest deferral relief for local property tax liabilities for one year in respect of 2019 local property tax liabilities and to continue to provide for the administration and collection of LPT by employers in line with PAYE modernisation changes due to come into effect on 1 January 2019.
Currently, in certain circumstances, it is possible to defer the payment of local property tax liabilities. Deferral is most commonly availed of by property owners whose annual income is less than €15,000 for a single person and €25,000 for a couple, whether this is a married couple, civil partners or certain cohabitants. This income threshold can be increased in the case of property owners paying mortgage interest. In regard to such mortgage interest payees, the higher income threshold will cease to apply for tax years after 2018, unlike the standard income threshold that will continue for one additional year.
The next valuation date for local property tax is 1 November 2019, which will determine tax liabilities for the years 2020 and 2021. Arrangements for this are currently being considered as part of the review of the local property tax being carried out by an interdepartmental group, as well as how payment deferrals will operate going forward. Pending the Minister’s consideration of the report of the review group and any Government decisions that may arise therefrom, the higher income threshold applied by section 133 of the Finance (Local Property Tax) Act 2012 is being extended until 31 December 2019 in line with the standard income threshold. This change is contained in amendment No. 18.
Amendments Nos. 8 to 17, inclusive, and amendment 19 set out the changes necessary to allow for the continued collection of local property tax when the PAYE system is modernised with effect from 1 January 2019. They are procedural and technical in nature. They simply involve a change to the way in which local property tax deducted by employers is reported to Revenue and the documentation to be used for this purpose. The tax will be deducted at the same time as heretofore and the amount will be exactly the same with no change in rates or computation.
There are a range of methods for paying local property tax, including the option to deduct at source from a salary or occupational pension. The Finance Act 2017 introduced a fundamental redesign and modernisation of the PAYE system and includes a move for employers to a real-time electronic system for engaging with Revenue from 1 January 2019. The changes to the collection of local property tax mirror income tax changes introduced in the Finance Act 2017.
Employers who are directed to deduct local property tax from the salary of a liable person will be required to notify Revenue of the making of the relevant deduction on or before the making of payments to that liable person. Employers must also file a monthly return to report the local property tax deducted each month. Penalties will apply for failure to comply with these requirements.
The legislative changes underpinning the continued administration and collection of income tax under PAYE modernisation were enacted in the Finance Bill 2017. The changes proposed simply mirror for local property tax the changes enacted for income tax in the Finance Act 2017 in this regard.
The Ceann Comhairle has ruled that provisions concerning the local property tax are not appropriate for inclusion in the Finance Bill. As the proposed provisions must have an operative date of 1 January 2019, they need to be provided for in law before that date. Hence, their proposed inclusion in this Bill. Will I move on-----