Dáil Éireann Debate, Thursday - 13 January 2011
92 Deputy Joanna Tuffy asked the Minister for Finance if he will provide an update in relation to the stamp duty changes made in the budget; to whom those changes apply; the exceptions that are being made to ensure that those who purchased a property immediately prior to the budget are not disadvantaged by the new stamp duty rates; and if he will make a statement on the matter. [1846/11]
View answerI announced in Budget 2011 a major reform of the charge to Stamp Duty on residential property transactions, which applies to all instruments executed on or after 8 December 2010. These changes have simplified the system by lowering the rates applicable and abolishing a number of exemptions and reliefs. The changes in rates are as follows:
|
Aggregate Consideration |
Rate of Duty |
|
First €125,000 |
0% |
|
Next €875,000 (up to €1m) |
7% |
|
Excess over €1,000,000 |
9% |
|
Aggregate Consideration |
Rate of Duty |
|
First €1,000,000 |
1% |
|
Excess over €1,000,000 |
2% |
In order to broaden the tax base, a number of reliefs and exemptions have been abolished as follows:
First Time Buyer's Relief;
Relief from Stamp Duty on new houses under 125 sq metres;
Reduced Stamp Duty on new houses over 125 sq metres
Consanguinity relief in respect of residential property transfers;
Exemption for residential property valued under €127,000; and
Site to child relief.
A transitional measure has been put in place for cases where these changes would increase the Stamp Duty payable on the transaction. The new rates will not apply where a binding contract is in place before 8 December 2010 and the instrument is executed before 1 July 2011. The transitional measure will ensure that those who had a binding contract in place before Budget day will not be adversely affected. I am aware that there will always be winners and losers in a situation such as this, but unfortunately this will happen no matter what date is chosen to commence any new measure.
93 Deputy Charlie O’Connor asked the Minister for Finance the number of formal submissions received on the proposed abolition of the section 23 tax relief scheme; if he will publish the names of persons and organisations who have made formal submissions; if he has arranged for a formal method of receiving submissions; if he will confirm that all formal submissions will be examined and responded to prior to the passage of the 2011 Finance Bill; and if he will make a statement on the matter. [1853/11]
View answer94 Deputy Charlie O’Connor asked the Minister for Finance the number of properties benefiting from the section 23 tax relief scheme up to the latest available date; his views on whether investors had legitimate expectation that the State would honour its agreement on the scheme in view of the fact that the benefit to the Exchequer was immediate and the benefit to the purchaser was for the agreed period; and if he will make a statement on the matter. [1854/11]
View answer95 Deputy Charlie O’Connor asked the Minister for Finance when he expects to have the promised impact assessment, as mentioned in his Summary of Budget Measures, carried out on the proposal to abolish the section 23 tax relief scheme; and if he will make a statement on the matter. [1855/11]
View answerI propose to take Questions Nos. 93 to 95, inclusive, together.
I have received submissions from industry groups and professional bodies and my officials have met with a broad spectrum of stakeholders including the Irish Taxation Institute, Irish Hotels Federation, Construction Industry Federation, Irish Property Owners' Association, Irish Auctioneers and Valuers Institute and Society of Chartered Surveyors in relation to the proposed changes to Section 23 and property-based tax relief schemes. In addition my Department has received a significant number of representations from individuals affected by the measures relating to property-based reliefs, which were announced in the Budget. All representations will be responded to in the normal manner in due course.
I am informed by the Revenue Commissioners that the information provided in tax returns by claimants of section 23 type tax relief is not sufficiently detailed to provide the number of properties benefiting from that scheme. The only relevant information available relates to 2,429 claims of section 23 type relief on the 2008 income tax returns, the latest available. These claims relate to properties for which tax relief was not previously claimed and exclude any claims made in an earlier year where these were subsequently carried forward into 2008 as unabsorbed losses. The corresponding numbers of claims for the tax years 2003 to 2007, where 2003 is the earliest year for which this information is available, were 1,952, 3,578, 4,126, 4,132 and 2,919 respectively.
I am advised by Revenue that they are not yet in a position to provide data in respect of the number of claimants for 2009, as all tax returns for that year have not yet been processed. The measures relating to Section 23 relief outlined in the National Recovery Plan and announced in the Budget were the subject of legal advice. It is proposed that an impact assessment will be undertaken into the effects of the phased abolition of the property-based measures and the "guillotine" provision in advance of the 2014 deadline to identify any significantly anomalous effects of the proposed changes.
