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Tax Code.

Dáil Éireann Debate, Thursday - 18 February 2010

Thursday, 18 February 2010

Questions (65, 66, 67, 68, 69)

Joan Burton

Question:

65 Deputy Joan Burton asked the Minister for Finance the cost to the Exchequer of property based tax reliefs for 2007, 2008 and 2009; the estimated cost for 2010 and 2011; and if he will make a statement on the matter. [8602/10]

View answer

Written answers

I am informed by the Revenue Commissioners that the relevant information available on the cost to the Exchequer of each of the property and area based tax reliefs is based on personal income tax returns filed by non-PAYE taxpayers and corporation tax returns filed by companies for the year 2007, the latest year that this information is available. These are set out in the following table:

Scheme

2007

€m

Urban Renewal

109.3

Town Renewal

34.6

Seaside Renewal

8.0

Rural Renewal

48.5

Multi-storey car parks

9.6

Living over the Shop

3.0

Enterprise Areas

2.8

Park & Ride

1.4

Holiday Cottages

12.4

Hotels

118.0

Nursing Homes

18.3

Housing for the Elderly/Infirm

2.6

Hostels

0.72

Guest Houses

0.02

Convalescent Homes

0.5

Qualifying (Private) Hospitals

12.0

Qualifying Sports Injury Clinics

1.8

Buildings used for childcare purposes

9.8

Psychiatric Hospitals

0.1

Mental Health Centres

0.0

Student Accommodation

42.0

Total

435.4

I am advised by Revenue that they are not yet in a position to provide data for 2008 in respect of tax costs of area and property incentives, as all tax returns filed for that year have not been processed. For the same reason, I am not in a position to provide the data requested by the Deputy for the year 2009.

As regards projections for 2010 and 2011, projections for income tax receipts are based on assumed movements in macro-economic parameters and not by reference to the costs of individual tax reliefs. Accordingly, I am not in a position to provide the projected cost data requested by the Deputy for the years 2010 and 2011 in relation to the above-mentioned reliefs.

Joan Burton

Question:

66 Deputy Joan Burton asked the Minister for Finance the expected end date for investment and expected end date for each of the property based tax reliefs that is the final year in which relief can be claimed; and if he will make a statement on the matter. [8603/10]

View answer

I am informed by the Revenue Commissioners that the termination dates for the various property-based incentive schemes vary depending on the scheme and are set out in the following table.

These termination dates are the dates by which the construction or refurbishment work on a building has to be carried out if the expenditure that is attributable to that work is to qualify for tax relief. Where a building is not completed by the termination date the expenditure attributable to any construction or refurbishment work that takes place after this date cannot qualify for tax relief.

In the case of nursing homes, convalescent homes, hospitals and mental health centres, two alternative termination dates have been included in the table. The earlier date relates to projects where no planning permission is required. The later date relates to projects where planning permission is required. There are also two alternative dates for the scheme for child care facilities that is being terminated by the Finance Bill 2010.

There are no set dates by which a person has to acquire a tax incentive property in order for tax relief to start to be claimed. Tax relief can only start to be claimed after a building has been completed and the building leased or owner-occupied for the purpose required by the particular scheme.

Once a building has been leased or owner-occupied and is in use for the required purpose, tax relief can be claimed over varying periods. In the case of capital allowances, tax relief is given over a set period depending on the particular scheme. For example, capital allowances for nursing homes are given at the rate of 15% of the qualifying expenditure for the first six years and 10% in year seven, whereas the allowances for commercial buildings under the rural renewal scheme are generally claimed over a 14-year period. In the case of residential accommodation, owner-occupier relief is given over a ten-year period, whereas ‘section 23' relief for rental accommodation may be given either immediately or over an indefinite period as it depends on the investor having sufficient taxable rental income to absorb the relief.

From the foregoing, it will be clear that it is simply not possible to provide an indication of the final year in which tax relief under these schemes will be claimed as the start year for relief can vary from building to building and the relief period applicable likewise can vary within some of the schemes.

Schemes

Termination Date

Urban Renewal 1994

30 April 1999

Temple Bar Area

31 December 1999

Seaside Resort

31 December 1999

Islands

31 December 1999

Customs House Dock

30 June 2000

Enterprise Areas

31 December 2000

Countrywide Refurbishment

31 July 2008

Urban Renewal 1999

31 July 2008

Town Renewal

31 July 2008

Rural Renewal

31 July 2008

Multi-storey Car Parks

31 July 2008

Living over the Shop

31 July 2008

Park and Ride

31 July 2008

Third Level Buildings

31 July 2008

Qualifying Sports Injury Clinics

31 July 2008

Hotels continue to qualify for capital allowances but over 25 years instead of over 7 years.

31 July 2008

Holiday Cottages

31 July 2008

Student Accommodation

31 July 2008

Nursing Homes

30 June 2010 or 30 June 2011

Housing for elderly/infirm

30 April 2010

Convalescent Homes

30 June 2010 or 30 June 2011

Hospitals

30 June 2010 or 30 December 2013

Mental Health Centres

30 June 2010 or 30 June 2011

Mid-Shannon Corridor Tourism Infrastructure Scheme

31 May 2013

Childcare Buildings

31 March 2011 or 31 March 2012 (Finance Bill 2010)

Specialist Palliative Care Units

Scheme awaiting Commencement Order

Joan Burton

Question:

67 Deputy Joan Burton asked the Minister for Finance the remaining legacy Exchequer cost of property based tax reliefs, up to 2020, on the basis of investments already made; and if he will make a statement on the matter. [8604/10]

View answer

I am informed by the Revenue Commissioners that the information provided in tax returns on the annual amounts of claims for property based tax reliefs is not sufficiently detailed to provide a basis for deriving an estimate of the remaining legacy cost to the Exchequer. I am not therefore in a position to provide the information requested by the Deputy.

Joan Burton

Question:

68 Deputy Joan Burton asked the Minister for Finance the cost to the Exchequer of hotel capital allowances to date; the total cost for 2007, 2008, 2009; the expected cost for 2010; and if he will make a statement on the matter. [8605/10]

View answer

Joan Burton

Question:

69 Deputy Joan Burton asked the Minister for Finance the cost to the Exchequer of hotel capital allowances to date in 2010; the total cost for 2007, 2008, 2009; the expected cost for 2010; the value of accelerated capital allowances for hotels that is those that are still within the clawback period; the number of hotels that have given rise to these tax breaks since they were introduced; the number of hotels which gave rise to these tax breaks that were still in business at the conclusion of the clawback period. [8606/10]

View answer

I propose to take Questions Nos. 68 and 69 together.

I am informed by the Revenue Commissioners that the relevant information available on the cost to the Exchequer of hotel capital allowances is based on personal income tax returns filed by non-PAYE taxpayers and corporation tax returns filed by companies for the years 2004 to 2007, the latest year for which this information is available. The relevant figures of cost to the Exchequer are set out in the following table alongside the figures for numbers of claimants:

Costs to the Exchequer of Hotel Capital Allowances

Year

Tax Cost

Numbers of claimants

€m

2004

37.7

611

2005

67.0

1,038

2006

106.6

1,515

2007

118.0

1,893

The estimated relief claimed has assumed tax foregone at the 42% rate for 2004 to 2006 and 41% for 2007 in the case of individuals and 12.5% in the case of companies for all years. The figures shown correspond to the maximum Exchequer cost in terms of income tax and corporation tax.

For the tax year 2003 and earlier years claims for tax incentive schemes on property were aggregated in tax returns with other claims and could not be distinguished from other reliefs claimed. Accordingly, the specific information on costs for 2003 and earlier years are not available. I am advised by Revenue that they are not in a position to provide data for 2008 and 2009 as the tax returns for those years are either being processed currently or are not yet due.

As regards projections for 2010, projections for income tax receipts are based on assumed movements in macro-economic parameters and not by reference to the costs of individual tax reliefs. Accordingly, I am not in a position to provide the projected cost data requested by the Deputy for the year 2010 in relation to the above-mentioned relief.

I have been informed by the Revenue Commissioners that the information requested on tax returns does not require the number of qualifying hotels to be specified or to distinguish between accelerated allowances and other capital allowances. Accordingly, the specific information requested by the Deputy in respect of these matters is not available.

It should be noted that any corresponding data returned by PAYE taxpayers in the income tax return form 12 is not captured in the Revenue computer system. However, any PAYE taxpayer with non-PAYE income greater than €3,174 is required to complete an income tax return form 11.

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