Thursday, 7 March 2013

Questions (65)

Brendan Smith

Question:

65. Deputy Brendan Smith asked the Minister for Finance if a waiver or reduction in the amount of household tax will be made available to senior citizens, particularly those with a disability in view of the fact that many senior citizens in this category do not have the resources to meet additional household payments; if he has any plans to introduce or consider introducing a waiver or reduction for senior citizens and or senior citizens with a disability; and if he will make a statement on the matter. [12186/13]

View answer

Written answers (Question to Finance)

While there is no specific exemption from or reduction in the charge to Local Property Tax (LPT) for senior citizens or senior citizens with a disability, the Finance (Local Property Tax) Act 2012 and the recently published Finance (Local Property Tax) (Amendment) Bill 2013 contain certain provisions that may be relevant, depending on the particular circumstances involved. For individuals on low incomes or those whose only income source is from the Department of Social Protection, the Finance (Local Property Tax) Act 2012 provides for the possibility of deferring the charge to LPT in certain cases. Under the 2012 Act, a system of deferral arrangements for owner-occupiers is available where there is an inability to pay the tax and certain specified conditions are met. A person who qualifies for full deferral can opt to defer 100% of the LPT liability. A person who qualifies for partial deferral can opt to defer 50% of the liability and must pay the balance of LPT.

The deferral arrangements available under the 2012 Act are as follows:

-

Condition Number

Condition

Full Deferral

1

Gross income for the year is unlikely to exceed €15,000 (single or widow/er) and €25,000 (couple)

Full Deferral

2

Gross income for the year is unlikely to exceed the adjusted income limit. This adjusted income limit is calculated by increasing the thresholds of €15,000 (single or widow/er) and €25,000 (couple) by 80% of the expected mortgage interest payments for the year 2013. This applies until 31 December 2017.

Partial Deferral

3

Gross income for the year is unlikely to exceed €25,000 (single or widow/er) and €35,000 (couple).

Partial Deferral

4

Gross income for the year is unlikely to exceed the adjusted income limit. This adjusted income limit is calculated by increasing the thresholds of €25,000 (single or widow/er) and €35,000 (couple) by 80% of the expected mortgage interest payments for the year 2013. This applies until 31 December 2017.

The 2013 Amendment Bill also provides for a full or partial deferral of the charge where there is an inability to pay the tax in certain other specific situations. In all cases, interest will be charged on LPT amounts deferred at a rate of 4% per annum. The deferred amount, including interest, will attach to the property and will have to be paid before the property is sold or transferred.

I am informed by the Revenue Commissioners that, for those who do not qualify for deferral of the tax, there is a wide range of payment options available to liable persons, which will allow them to pay their LPT liability in full or to pay the tax for 2013 in equal instalments over the period 1 July 2013 to end December 2013.

In accordance with section 2 of the Finance (Local Property Tax) (Amendment) Bill 2013, an exemption from the charge to LPT will apply to a residential property purchased, built or adapted to make it suitable for occupation by a permanently and totally incapacitated individual as their sole or main residence, where an award has been made by the Personal Injuries Assessment Board or a court, or where a trust has been established, specifically for the benefit of such individuals. In the case of adaptations to a property, the exemption will only apply where the cost of the adaptations exceeds 25% of the chargeable value of the property before it is adapted. The exemption ends if the property is sold and the incapacitated individual no longer occupies it as his or her sole or main residence.

Section 6 of the 2013 Amendment Bill provides for a reduction in the market value of a residential property that has been adapted for occupation by a disabled person where the adaptation has been grant-aided by a local authority. The reduction is limited to the lesser of the market value attributable to the adaptation work carried out on the property and the maximum grant payable under the relevant local authority scheme. The relief ends on the sale or transfer of a property that has been adapted, unless the person with the disability continues to reside in the property.

Furthermore, the impact of specific adaptations on a property can be to decrease the value which may in turn impact on the LPT liability. I am advised by the Revenue Commissioners that details of the existing exemptions are available on Revenue’s website www.revenue.ie , where the Commissioners have recently published a useful Guide to Local Property Tax. This will be revised shortly to take account of the provisions of the Finance (Local Property Tax) (Amendment) Bill 2013. It should be noted, however, that the provisions contained in the 2013 Bill are subject to its enactment.