Dáil Éireann Debate, Tuesday - 5 February 2013
242. Deputy Finian McGrath asked the Minister for Finance in regard to non-principal private residence charge, if there will be double taxation for six months of 2013, in view of the fact that such residents will be liable for both the NPPR charge as well as the new local property tax. [5289/13]
View answer256. Deputy Billy Timmins asked the Minister for Finance the position regarding double taxation, that is, household property tax and non principal private residence charge on rental properties (details supplied); if this matter will be re-examined; and if he will make a statement on the matter. [5372/13]
View answer290. Deputy Terence Flanagan asked the Minister for Finance his plans to provide fairness in the tax treatment in the Finance Bill for private landlords who have to pay one year's non principal private residence charge of €200 in March followed by an undetermined amount of local property tax in July, followed again by and undetermined amount in water charges in 2014; and if he will make a statement on the matter. [5952/13]
View answerI propose to take Questions Nos. 242, 256 and 290 together.
The inter-Departmental Group chaired by Dr Don Thornhill on the design of a property tax (the “Thornhill Group”) recommended that the Non-Principal Private Residence charge (NPPR) should be absorbed into the Local Property Tax (LPT) as a separate supplemental tax in addition to the LPT at the existing level applying to non-principal private residences. However, the Government decided that while the NPPR will be collected in 2013 when a half-year LPT will apply, it should be discontinued thereafter. There is no exemption from the LPT for those who are liable for the NPPR.
As set out in the Local Government (Charges) Act 2009, as amended, liability to pay the NPPR is determined on the basis of ownership of the property in question on the "liability date" which is 31 March for 2013. The LPT does not come into effect until 1 July 2013. The Government decided to extend the NPPR into 2013 to ensure as smooth a transition as possible for local authorities pending the introduction of the full LPT.
Residential properties rented by landlords will be subject to Local Property Tax from 1 July 2013, with the owners of the property – in those cases, the landlord – being the liable person for payment of the tax. The Thornhill Group, the inter-departmental group, chaired by Dr Don Thornhill, established to consider the structures and modalities of a property tax, recommended that owners and not occupiers be the liable persons for the Local Property Tax. This was also the view of the 2009 Commission on Taxation. Given that some rental properties have high tenant turnover, which would present significant difficulties in determining liability and collecting taxes, as well as increasing the cost of collecting the tax, the Government accepted this recommendation. Occupier liability may also give rise to perceptions of unfairness if the occupier on the valuation date (i.e. the date at which occupation of the property is deemed by law to create the tax liability) is no longer the occupier on the date at which payment of the tax becomes due.
The Local Property Tax is not an allowable deduction from rental profit for tax purposes. This is the same treatment which applied to the Household Charge and the NPPR Charge. It is, however, proposed to phase in deductibility of the Local Property Tax.
Water charges are a matter for the Minister for the Environment, Community and Local Government.
